Degearing


Also found in: Dictionary.

Degearing

The process of a company repaying debt and issuing equity in order to alter its capital structure. A capital structure is how a company finances itself. Some (though not all) analysts believe that minimizing debt and maximizing equity can reduce the company's risk because, most of the time, paying coupons on debt is required while paying dividends on equity is not. Degearing is therefore a strategy to decrease risk while also maintaining the same level of financing. See also: Deleverage.
References in periodicals archive ?
Therefore, we anticipate both further degearing, and more importantly M&A to be a significant driver of returns in the next year.
On a cash flow basis, the UK market as measured by EV/EBITDA is cheaper than even the nadir of 2009 due to strong degearing.
Lavendon subsequently released final results in March, which demonstrated strong degearing and communicated several self help initiatives which should improve the operational and financial performance of the business.
The other three drivers of equity return: earnings growth, re-rating and degearing all remain favourable among our portfolio companies.
and degearing was materially better than anticipated.
These do not impact our core investment thesis of degearing through capital expenditure reductions.
Value creation for investors in public companies is typically driven by four main factors, namely Earnings Growth, Re-Rating, Degearing and Corporate activity.