Corporate & Financial Restructuring

Introduction

Just because a company needs restructuring -- financial or operational -- 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; either 1) Financial restructuring or 2) 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 through case studies, examples and Excel® models as well as discussions of alternatives.Main ideas explored include:

• What is restructuring & what are the alternatives
• When & why should you restructure vs. not
• How to calculate the “real” value of a firm both before & after a restructuring
• What is Leverage; when to use it and how best to finance it
• When to divest an operating unit & how to do it to optimize the remaining value

Objectives

On completion of this module delegates will be able to:

• Fully understand the various form of restructuring
• Discuss the real difference between Corporate & Financial restructuring
• Know when to acquire vs. divest an operating unit
• How to value an entity or an entire firm
• Know when to Leverage vs. Deleverage
• Learn to use a range of Excel models (provided)

Training Methodology

The training comprises teaching sessions covering each topic area with the theory blended with practical application. Additionally, real world examples & case studies will be used so that the Delegates will be able to apply these techniques immediately. Delegates then use the provided Excel® templates to apply their new knowledge case studies to reinforce the concepts.

Organizational Impact

The organization will benefit by:

• Having Experts in-house to develop advanced decision support models
• Higher productivity of personnel involved in restructuring analysis
• Improved performance of corporate & financial restructuring methods
• Better ways to plan & measure results of decisions
• Realizing better options when facing divestiture choices
• Better integration between functional areas leading to better decisions

Personal Impact

The delegate will benefit by:

• Developing an improved understanding of the risks & benefits of corporate & financial restructuring in today’s challenging world.
• Really understanding the risks & rewards of leverage
• Being able to calculate the value of the firm in the real world
• Understanding to cost/benefit of a divesture
• Enhancing their knowledge with the use of the models in the case studies
• Significantly increasing their Excel® analysis skills

SEMINAR OUTLINE 

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
• Case study
• Excel model for decision

The Why & How of Restructuring

• The Why & How of it
• Why companies really 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
• Example
• Case study
• Excel model for decision

Valuation in Restructuring

• Valuation
• Which approach to use to be 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
• Case study
• Excel model for decision

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]
• Case study
• Excel model for decision

Divestitures

• Divestitures
• Why divest a business unit
• The rationale for divestiture vs. alternatives
• Divestiture vs. a spin off
• Equity carve-outs
• Voluntary liquidations
• Case study
• Excel model for decision
• Summary and Conclusion