CORPORATE RESTRUCTURING STRATEGIES

Presented byMUNESH.PALURU

meaning

Corporate restructuring is all about creating value. Of course , most of the daily decisions that you will make as professional managers or investors will have an impact on value. sometimes, however, the value of an enterprise falls significantly short of where it could be. In other words, a company can find itself facing a large ‘value gap’. the size of a value gap can be huge for large companies it can be billions of dollars.

Value gap can arises for variety of reasons

• Poor management• Emergence of new strategic opportunities • Failure of the capital markets to

recognize( i.e., market inefficiency)• Increased competition• Macro-economic shocks• changes in technology, taxes or regulation.

Objectives of corporate restructuring

• Evaluation of current endowments and performance

• Fine tuning of available skills, technology and plant

• Assessment of changes in business environment• Identification of new business opportunities• Securing of a competitive edge for the

corporation

Strategies of corporate restructuringExpansion strategies

Re organisiation strategies/sell-offs

Financial engineering strategies

Governance and control strategies

alliances divestitures esop compensation arrangements

franchising Equity carve-outs exchange Premium buy backGreen mail

investment Going public lbo Proxy contest

Joint ventures privatization Leveraged recapitalization

Take over defences

mergers Spin-offs and split-ups

Share repurchase

Purchase of divisions of business unit

Tracking stock

Supplier network

Tender offer

Thank you