CORPORTE EXIT

AND
RESTRUCTURING STRATEGIES
- Dr.K.VENKATA RAO
MEANING OF RESTRUCTURING
A Significant modifications made to the debt,
operations or structure of a company.
MOTIVES FOR EXITING AND
RESTRUCTURING
Increasing corporate focus
Raising Funds
Lack of Fit
Risk reduction
Discarding unwanted businesses from Prior
Acquisitions
Increasing transparency


RESTRUCTURING STRATEGIES
Divestitures
Spin-Offs
Equity Carve-Out
Split-Ups
DIVESTITURE
A Divestiture is the sale of a portion of a
firms assets to outside party. Such assets
may include a product line, subsidiary, or
division, generally resulting in cash
infusion to the parent.
SPIN-OFFS
A Spin-Off is a transaction in which a parent
creates a new legal subsidiary and
distributes shares it owns in the subsidiary
to its current shareholders as a stock
dividend in direct proportion to the
shareholders current holdings of the
parents stock.
EQUITY CARVE-OUTS
An Equity Carve-Out occurs when a parent
company sells a minority stake in a
subsidiary.
SPLIT-OFFS
A split-off is a means of reorganizing an
existing corporate structure in which the
stock of a subsidiary or newly affiliated
company transferred to the stockholders
of the parent company in exchange for
their stocks in the parent company.
SPLIT-UPS
A split-up refers to a restructuring strategy
in which a single company splits into two
or more separately managed firms. Shares
of the original company are exchanged for
shares of new companies. After a split-up,
the original company ceases to exist.

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