Introduction:
When a company needs restructuring - financial or operational - it does not mean it will do so. An erosion of Stakeholder value may occur for a variety of reasons, including Management interference. This program shows you how to do things right.
Corporate restructuring is defined as 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: Financial restructuring or Operational restructuring. This seminar emphasizes the practical side of corporate restructuring in today’s ever-challenging world. It focuses on the two objectives of the practical application
Targeted Groups:
- Top Management of the Corporates
- Finance Managers
- Finance Professionals
- Operations Professionals
- Persons who want to gain new knowledge and experience to improve their career
Course Objectives:
At the end of this course the participants will be able to:
- Understand the various form of restructuring
- Discuss the real difference between Corporate & Financial restructuring
- Recognize when to acquire VS divest an operating unit
- Learn how to value an entity or an entire firm
- Know when to Leverage vs. Deleverage
- Understand the risks & benefits of corporate & financial restructuring in today’s challenging world.
- Understand the risks & rewards of leverage
- Calculate the value of the firm in the real world
- Understand the cost/benefit of a divesture
- Enhance their knowledge with the use of the models
- Significantly increasing their Excel® analysis skills
Targeted Competencies:
- Knowledge about Acquiring
- Financial Restructuring
- Excel analysis skills
Course Content:
Unit 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
Unit 2: The Why & How of Restructuring:
- The Why & How of it
- Why companies 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
Unit 3: Valuation in Restructuring:
- Valuation
- Which approach to use to be the most accurate
- Liquidation value
- Fire sale
- Orderly
- Asset-based methods
- Comparables – market-driven
- Free cash flows
- Free cash flow to the firm
- Free cash flow to equity
- Option-based
Unit 4: Leverage:
- Leveraging and deleveraging
- Leverage – yes or no; pros & cons
- 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
- Excel model for decision
Unit 5: Divestitures:
- Why divest a business unit
- The rationale for divestiture vs. alternatives
- Divestiture vs. a spin-off
- Equity carve-outs
- Voluntary liquidations
- Excel model for decision
