recapitalization

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Recapitalization

The act of changing a company's capital structure. For example, a highly leveraged company (one that is largely financed with debt) may repay most of its debt and issue stock so that it is financed with equity. On the other hand, a company may make a self-tender offer and buy back most of its stock while issuing bonds so that it becomes debt-financed. Some companies may believe that recapitalization can be advantageous, but the capital structure irrelevance principle states that a company's capital structure has no bearing on its profitability. Recapitalization is also called an e-type reorganization.

recapitalization

A change a company makes in the long-term financing mix it uses. For example, a firm may borrow long-term funds (that is, it may sell bonds) in order to acquire the money needed to repurchase a block of its outstanding stock. Because recapitalization will often affect the level and the volatility of earnings per share, it is of interest to stockholders. Recapitalization often occurs when a firm attempts to reorganize while in bankruptcy proceedings.
References in periodicals archive ?
Fitch estimated that the likely fiscal cost of restructuring and recapitalizing the Spanish banking sector could be as high as 100 billion euros, which is 9 percent of Spanish gross domestic products.
Wetekam said the Air Force's priorities are winning the war on terrorism, developing and caring for airmen, and modernizing and recapitalizing aircraft and equipment.
But for we medics, recapitalizing our people is job one.
banks and savings institutions must contribute to paying off the $780 million annual interest payments on $8 billion of Financing Corporation (FICO) bonds that were issued in the late 1980s to bail out the savings and loan industry by recapitalizing the defunct Federal Savings and Loan Insurance Corporation.
And as we work our way through this Global War on Terrorism, and as we work our way through recapitalizing an Air Force, I would only ask you to keep in mind that this is the oldest inventory we've ever operated, and we're going to have to modernize this inventory.
We are now in the process of recapitalizing our balance sheet.
Berkshire Partners is very excited to join JH Partners and senior management in recapitalizing the Company at this juncture and supporting MD Beauty's growth going forward.
It takes us to recapitalizing an aging fighter force.
By recapitalizing our stock, continuing our acquisition strategy, pursuing our merger opportunity, and aggressively bringing into full production our extensive properties, we expect our valuation in the marketplace to be fully realized over the coming months," Ehrman concluded.
Management's decision to choose this path will result in a higher yield market cap by acquiring cash flow blue chip publicly traded companies by recapitalizing the true underlying share value.
Crown has carried out the initial stages in recapitalizing the company.
OTC BB:CCAP) announced that the company is being reorganized and new management has been elected for the purpose of recapitalizing the corporate shell in order to merge with a private Internet incubator company.