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What is Corporate Restructuring?

Most corporate bodies that endure over an extended period need to adapt to changing circumstances. Organisations generally find it very difficult to adapt to change especially where it is severe sudden and completely unexpected. Even when changes are gradual many organisations frequently fail to recognise them and to make the necessary changes in good time.

It is these failures that lead for the need of corporate restructuring. This is normally a radical process where, following a period of intense analysis, major changes are made relating to the nature and the management of the business. Usually these activities result in some form of major cost-cutting (normally a reduction in personnel employed) and frequently changes in the management team.

Corporate restructuring is usually a painful and difficult task even for the most accomplished management team to achieve successfully. Most corporate restructuring fails either because the measures taken are inadequate or because the timing is wrong. Good examples here occur in cyclical industries such as banking or aviation where a company makes a mistake by over-expanding too much in some particular aspect of its business. A new management team is brought in to restructure the business and promptly disposes of part of the business at a distressed price only to find that shortly after the transaction has been completed the sold activities begin to rise significantly in value as the market up cycle begins again.

Corporate restructuring is nearly always a costly financial process as it results in a write-down in the book value of assets and often involves large compensation payments for forced employee dismissals. Thus in situations where corporate restructuring is required it is important to get both the process and implementation right.

Why do Corporate Restructuring?

In short corporate restructuring can usually be avoided if a company is well managed by a strategically aware management team. However, there may be exceptions here where such a company sees opportunities to profitably conduct merger and acquisition through re-organisation of other businesses.

Most corporate restructuring takes place as a last resort when all other attempts to manage the business have failed.

The MSP Solutions Approach

MSP Solutions have specialist expertise in corporate restructuring as a number of its key people have been involved in this type of activity in several business sectors. A key part of getting successful corporate restructuring is gaining an accurate understanding the business dynamics. MSP Solutions believes that securing an external expert perspective can be very helpful to clients needing to engage in this process.

The benefit to our clients

Understanding the market and technical dynamics is critical to the success of analysis of what steps are required to be made to the business and how those steps are to be implemented. Risk analysis is also important. MSP Solutions is able to offer sound and independent advice to clients in these areas. As its people have been previously involved in both successful and failed restructuring MSP Solutions also has a practical approach toward implementation.