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Suárez Corporate Restructure

Corporate Restructuring

Firms use restructuring strategies in response to the changes in the external and internal environment. In light of the rapid environmental changes, restructuring is one of the best available strategies for companies to create maximum value for the stakeholders.

The four forms of corporate restructuring are expansion, sell‐offs, corporate control, and change in ownership structure. In an economy that is slowing down or contracting, top management have two alternatives for maintaining profitability levels.

First:

Reduce headcount and investment, and sell assets under a ‘denominator‐driven’ belt‐tightening program. This type of approach is called denominator management.

Second:

Increase profitability by improving productivity. This approach is referred to as ‘numerator‐focused’ management. Management can then increase productivity by maximizing the components of the numerator, and minimizing the components of the denominator.

Suárez assist its clients with complex financial restructuring solutions to stakeholder groups across APAC & MEA. We support debtors, creditors and other stakeholders through challenging situations, including liquidity problems, over‐leverage, under‐performance, right‐sizing or other business transition issues.

The turnaround process consists of four stages. During the first stage (the decline stage), decline starts from firm equilibrium and reaches a crucial stage . As the firm’s performance reaches this stage , management begins to take corrective actions — this is the second stage of the turnaround process. The third stage of the turnaround process, the transition stage, is the most complex of all the stages. At this stage, the firm experiments with different strategies,structures, cultures, and technologies. During the fourth stage, the outcome stage, the outcome of the activities undertaken during the third stage is realized. The outcome could be either success or failure.