FREQUENT QUESTIONSCapital restructuring
What is capital restructuring?
It is a mechanism that allows the company to find the appropriate formula to establish the amount of liabilities as well as to maintain them in the best condition.
Why embark on a capital restructuring?
It is important to learn suggestions of financing sources and to establish the optimal mix of Liabilities and Assets to achieve an appropriate level of leverage.
How is a restructuring accomplished?
It may be the consolidation debt, credits, and other company liability. All must be part of a comprehensive Financial Restructuring to prevent a company from going bankrupt.
What are the steps involved in a capital restructuring?
- Determining the structure of capital
- Analysis of sources and uses of the funds
- Suggestions for sources of financing
- Optimal mix of the Liability/Net worth ratio
- Financial leverage and payment capacity
When is a capital restructuring required?
Any moment is good to embark in a capital restructuring process, as long as the conditions of the liabilities are susceptible of improvement. It is of course, absolutely necessary when entering into a default and the intention would be to avoid the company from becoming financially insolvent.
What are the tools used in capital restructuring processes?
The tools that are generally employed in Financial Restructuring processes are usually the following: Extension of credit terms; reduction of interest rates; prepayment of obligations from the sale of assets; accord and satisfaction; capitalization by shareholders; among other.