2. Corporate restructuring can lead to change
along one or more of the three direction
i) Assets and Portfolio
ii) Capital Structure
iii) Organisation and Management

3. 1) Portfolio and Assets Restructuring
a) Mergers & Acquisitions
› Merger of two or more legal entities or companies
› Purchase of assets/business of another firm as a
going concern
› Substantial acquisition of share of a legal entity
leading to change of control in the same
b) Divestitures
› Divestment of assets/business as going concern

4. › Divestment of controlling stake of a legal entity
leading to change of control
› Spin-off of a division or a subsidiary into a separate
legal entity
› Split-off
› Split-up
› Equity carveout

5. 2) Financial Engineering - Leading to changes in
existing capital structure
› Alteration in debt-equity mix/debt-equity swaps
› Issue of different classes of shares
› Issue of different types of debts to meet fixed
and working capital needs
› Infusion of foreign debts and equity
› Buyback of shares

6. 3) Internal Streamlining and Business Process Re-
engineering
› Downsizing of head count
› Cost reduction programmes
› Closure of uneconomic units
› Disposal of idle assets
› Business process re-engineering

7.  Acquisitions is capital intensive hence require
lenders.
 Diversification sometime destroy its value which i
turn devolve the old shareholder and to regain
from the low value it need new shareholders to
buy equity to get fund.
 Acquisition benefit the acquired firms rather than
acquiring firms. So as it destroy existing
shareholders.
 To raise debt, to increase assets based capital,
firm go for new shareholders by doing corporate
restructuring

8.  To overcome from debt ridden financial report
organisation go for corporate restructuring to
get new shareholders to get fresh funds
 When organization failed to give adequate
profit margin, its share falls and to enhance
the value of share organization go for
corporate restructuring by going for merging
or acquisition, which leads to new lenders.