What is restructuring of a corporation. Which group of investors is usually responsible for this.

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justaguide | College Teacher | (Level 2) Distinguished Educator

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Restructuring is a term used with reference to changes made in the ownership of a corporation, its legal structure, how operations take place in the company, etc. These are done to ensure maximum returns for investors of the corporation. The restructuring of a company is usually initiated by large share holders that have a substantial voting power and are in a position to force changes to take place.

Many corporations do not make gradual changes in their way of operations as conditionds change with time and continue with what they started. This can prove to be very inefficient and one that provides very low returns. Corporations could also have a financial strructure that increases the cost of funds or have units that can be separated without impacting the core operations.

These are some of the actions that are undertaken during the process of restructuring. The intention here is to streamline operations, eliminate redundant units and those that are not profitable, change the ownership and financial structure to make cost of funds as low as possible, etc.


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