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What is restructuring?
More generally, however, divestitures, carve out IPOs, spin offs, etc.
Early 1990s: corporate restructuring identified with troubled debt restructuring: workouts and reorganization
Stock market
Increasing competition
Change in regulation
Achieve growth and survive Gain Better Competitive Position Focus on core activities Achieve economies of scale. Funds Raising Utilization of Excess cash DDT minimization Tax Planning & Cost reduction Other Reasons Bail out takeover Diversification Family Separation Warding- off Predators
Restructuring hexagon
Information gap
Financial engineering: leverage, dual class stock, carve outs, tracking stock, employee ownership, debt restructuring
Dimensions of restructurings
Asset restructuring
Dimensions of restructuring, II
MBOs, LCOs ESOPs, Employee buyouts Active investors, institutional blockholders IPO Spin off, carve out IPO, letter stock
Conversion to Company Limited partnerships Leasing Joint ventures Securitization Project finance Value based management programs (EVA, etc.)
Incentive restructuring
Dimensions of restructuring, IV
Corporate control
Buy Back Antitakeover amendments Dual-class recapitalizations Greenmail/Standstill agreements Poison pills/Charter amendments Defensive asset/ownership restructurings
Conclusions
Start early - other markets are growing Build domestic base Establish an IPO track record
Targeted private equity can be used effectively to provide capital and enhance corporate governance Structure for growth
Contact details
Nivedita R. Sarda, Advocate Vedanta Law Chamber
505, Fourth Floor, Apex Mall, Tonk Road, Jaipur - 302004