Restructuring is a term used to describe the measures by which a company, company or group changes completely or partially and / or is being rebuilt. Some factors have a significant impact on the restructuring of companies, companies and corporations: the globalization of the economy, fierce international competition, technological progress, the increasingly restrictive practice of lending to credit institutions, and a change in awareness.
Keyword energy transition and legal changes in the basic conditions of companies (keyword deregulation). Restructuring is usually aimed at expanding, maintaining or restoring competitiveness and, in critical situations, ensuring survival. Restructuring is becoming an ongoing management challenge.
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Corporate crises as a trigger for measures to adopt amendments or renew a company through restructuring. Restructuring is usually caused by a corporate crisis. A distinction can be made between strategy, success or liquidity crisis. The most common reason for restructuring is the crisis of success, followed by the crisis of strategy and the crisis of liquidity.
There is a connection between these types of crises, as shown in Figure 1. If a strategic crisis is not recognized or not recognized on time, it inevitably leads to a profit crisis, which can quickly turn into a liquidity crisis, especially in cases of low capitalization. As the crisis develops, the need for action on the part of management is constantly increasing, while at the same time, the ability to maneuver is rapidly decreasing. Interest refers to the response of the companies surveyed and does not necessarily correspond to the “true” cause of the crisis. Most crises are strategic, but only in cases they are recognized as such by the interviewed management. Internal and external causes may be responsible for the emergence of a corporate crisis.
In addition, due to false market valuations, lack of experience and poor management style, as well as poor investment.
Another important reason is the insufficient financial resources of the company. Too low capital can be caused by a prolonged loss situation that depletes capital. Even improper financing sometimes has a negative effect: for example, if shareholders provide loans to shareholders instead of the necessary capital in order to receive interest income even in the loss phases and withdraw it from the company as soon as possible.
Therefore, he is not liable as a shareholder for the obligations of the company. In particular, the creditworthiness of a company suffers from false financing. This may affect the increase in the cost of loans (risk premium), which will lead to a further increase in the interest load on the company.
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As banks reduce existing loans or terminate loan agreements due to insufficient creditworthiness, the company must resort to a more expensive, but more liquid, option to finance leasing. This is also due to company revenues.
Companies that have been acquired by financial investors and which are financed by debt as a liability as a result of the merger of the parent company and subsidiary (downward merger) are also under capitalized. Banks that often swear (lenders) are rarely the cause of a corporate crisis. Nonetheless, lending institutions make a decisive contribution to ensuring that impending corporate crises – especially at the start of a liquidity crisis – are significantly tightened and accelerated by restrictive credit policies (ibid.).