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
Course Objectives of Corporate & Financial Restructuring
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 of Corporate & Financial Restructuring
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 of Corporate & Financial Restructuring
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 Corporate & Financial Restructuring
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
Course Outlines of Corporate & Financial Restructuring
Day 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
- Case study
- Excel model for decision
Day 2:
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
Day 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
- Case study
- Excel model for decision
day 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]
- Case study
- Excel model for decision
day 5:
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
