CORPORATE RESTRUCTURING MEANING

DEFINITIONa. A change in the capital structure that is not in the ordinary course of the business orb. Change in the ownership structure or control over management orc. Change in the business capacity or portfolio by an inorganic route.

Why Corporate restructuring?

Nothing is permanent except change.

What could be the reasons for change? Increased competition, Advent of a new & more efficient technology, Emergence of competing products Emergence of new markets/ new class of consumers Demographic changes Business cycles, etc To achieve economies of scale /scope. To avail tax benefits. To achieve synergy To increase market share /revenue.

Activities which are not termed as corporate restructuring: Initial creation of corporation. Change in internal command structure or hierarchy Change in the business process. Downsizing Outsourcing, ERP, TQM, Franchising, Networking, Licensing.

Forms of Corporate Restructuring1. Merger2. Consolidation3. Acquisition4. Divestiture5. Demerger6. Carve out7. Joint venture8. Reduction of capital9. Buy- back of securities10. Delisting of securities/ Company.