Corporate & Financial Restructuring

Introduction

Just because a company needs restructuring – financial or operational – does not mean it will do so. An erosion of Stakeholder value may occur for a variety of reasons, including Management interference. This program shows you how to do things right.

Corporate restructuring is defined as any fundamental change in a company’s business or financial structure, designed to increase the company’s value. Corporate restructuring is often divided into two parts; either 1) Financial restructuring or 2) Operational restructuring. This seminar emphasizes the practical side of corporate restructuring in today’s ever-challenging world. It focuses on the two objectives of the practical application through case studies, examples and Excel® models as well as discussions of alternatives.

Main ideas explored include:

  • What is restructuring & what are the alternatives
  • When & why should you restructure vs. not
  • How to calculate the “real” value of a firm both before & after a restructuring
  • What is Leverage; when to use it and how best to finance it
  • When to divest an operating unit & how to do it to optimize the remaining value

Seminar Objectives

On completion of this module delegates will be able to:

  • Fully understand the various form of restructuring
  • Discuss the real difference between Corporate & Financial restructuring
  • Know when to acquire vs. divest an operating unit
  • How to value an entity or an entire firm
  • Know when to Leverage vs. Deleverage
  • Learn to use a range of Excel models (provided)

Training Methodology

The training comprises teaching sessions covering each topic area with the theory blended with practical application. Additionally, real world examples & case studies will be used so that the Delegates will be able to apply these techniques immediately. Delegates then use the provided Excel® templates to apply their new knowledge case studies to reinforce the concepts.

Organizational Impact

The organization will benefit by:

  • Having Experts in-house to develop advanced decision support models
  • Higher productivity of personnel involved in restructuring analysis
  • Improved performance of corporate & financial restructuring methods
  • Better ways to plan & measure results of decisions
  • Realizing better options when facing divestiture choices
  • Better integration between functional areas leading to better decisions

Personal Impact

The delegate will benefit by:

  • Developing an improved understanding of the risks & benefits of corporate & financial restructuring in today’s challenging world.
  • Really understanding the risks & rewards of leverage
  • Being able to calculate the value of the firm in the real world
  • Understanding to cost/benefit of a divesture
  • Enhancing their knowledge with the use of the models in the case studies
  • Significantly increasing their Excel® analysis skills

Who Should Attend?

  • Corporate finance officers
  • Strategic planners
  • Accounting
  • Lenders
  • Investors
  • Mergers & Acquisition specialists
  • Corporate officers
  • Commercial and investment bankers
  • Securities analysts
  • Private equity specialists
  • Asset managers
  • And other individuals whose professional future may be enhanced by an understanding of restructuring techniques.

 

Programme Outline

Day 1 - Introduction to Restructuring

  • Introduction to restructuring
  • The Restructuring Framework
  • Proactive – planning the restructure before it is needed
  • Defensive – planning the restructure because it is needed
  • Distress – planning the restructure when the is no choice
  • Restructuring parties
  • Creditors – what do they expect
  • Shareholders– what do they hope for
  • Employees– what do they wish for
  • Case study
  • Excel model for decision

 

Day 2 - The Why & How of Restructuring

  • The Why & How of it
  • Why companies really restructure
  • How do companies successfully restructure in today’s world
  • When is the right time to restructure
  • The coordination and implementation of it all
  • The checklist for success
  • The “as is” value – what is the firm worth today
  • What is the product/service mix to decide what to keep and what to divest
  • Strategic partner or merger – the difference brings what value
  • Leverage – yes or no; pros & cons
  • Example
  • Case study
  • Excel model for decision

 

Day 3 - Valuation in Restructuring

  • Valuation
  • Which approach to use to be most accurate
  • Liquidation value
  • Fire sale
  • Orderly
  • Asset-based methods
  • Comparables – market driven
  • Free cash flows
  • Free cash flow to the firm
  • Free cash flow to equity
  • Option-based
  • Case study
  • Excel model for decision

 

Day 4 - Leverage

  • Leveraging and deleveraging
  • Leverage – yes or no; pros & cons
  • Establishing required rates of return
  • Adjusting the costs of debt and equity for leverage
  • Leverage optimization through capital structure (Example)
  • Bond buybacks (Example)
  • Leveraged Buy Out (LBO)
  • Going private – the costs vs. the benefits
  • The rationale for high leverage
  • Calculating your capacity for debt
  • Case study
  • Excel model for decision

 

Day 5 - Divestitures

  • Divestitures
  • Why divest a business unit
  • The rationale for divestiture vs. alternatives
  • Divestiture vs. a spin off
  • Equity carve-outs
  • Voluntary liquidations
  • Case study
  • Excel model for decision
  • Summary and Conclusion