Corporate & Financial Restructuring
Corporate restructuring entails 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:
1. Financial restructuring
2. Operational restructuring
Financial restructuring relates to improvements in the capital structure of the firm. An example of financial restructuring would be to add debt to lower the corporation's overall cost of capital. For otherwise viable firms under stress it may mean debt rescheduling or equity-for-debt swaps based on the strength of the firm. If the firm is in bankruptcy, this financial restructuring is laid out in the plan of reorganization.
The second meaning, operational restructuring, is the process of increasing the economic viability of the underlying business model. Examples include mergers, the sale of divisions or abandonment of product lines, or cost-cutting measures such as closing down unprofitable facilities. In most turnarounds and bankruptcy situations, both financial and operational restructuring must occur simultaneously to save the business.
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
- How to use the Success Checklist
- Know when to Leverage vs. Deleverage
- How to use Leveraged Restructuring
- When & how to Divest a unit
- Differentiate Merger from Acquisition
- Learn to use a range of Excel models (provided)
The seminar is of relevance to corporate finance officers, strategic planners, accounting, lenders and investors, as well as those involved in mergers, buyouts and restructurings. This includes 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.
The training comprises teaching sessions covering each topic with demonstrations of the applications. Additionally, examples & case studies will be used so that the Delegates will be able to apply these techniques in the real world. Delegates then use the templates provided in order to apply the knowledge gained on each section to short case studies.
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
- Better integration between functional areas leading to better decisions
Each person on the seminar will develop an improved understanding of the risks & benefits of corporate & financial restructuring in today’s challenging world. They will further enhance their knowledge with the use of the models in the case studies.
The seminar emphasizes the practical side of corporate restructuring in today’s world. It focuses on the two objectives of the practical application through case studies as well as discussions of alternatives. Main ideas explored include:
- Securing asset-based loans (accounts receivable, inventory, and equipment)
- Securing mezzanine and subordinated debt financing
- Securing institutional private placements of equity
- Achieving strategic partnering
- Identifying potential merger candidates
Just because a company needs restructuring -- financial or operational -- does not mean it will undertake the necessary reforms. Management and controlling shareholders may prevail for an extended period, during which time minority shareholders and/or creditors suffer an erosion of value. Many have managed to avoid both repayment and restructuring, however, and remain overly indebted and invested in unprofitable businesses. This program shows you how to do it right.
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
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
Day 3 – Valuation in Restructuring
- Valuation
- Which approach to use to be most accurate
- Liquidation value
- Asset-based methods
- Comparables – market driven
- Free cash flows
- Free cash flow to the firm
- Free cash flow to equity
- Option-based
- Example
Day 4 – Leverage
- Leveraging and deleveraging
- 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
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
- Example
- Summary and Conclusion
Oxford Management Centre
John
Eccles House
Robert Robinson Ave
Oxford Science Park
Oxford
OX4 4GP
United Kingdom
Tel:
+44 1865 338088
Fax:
+44 1865 338100
email
info@oxford-management.com
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