asset stripping


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Asset Stripping

A form of corporate raiding in which a company acquires a target company and then sells some of its assets, usually to repay its (the corporate raider's) debt. Often this debt is the debt incurred in the process of taking over the target company. The corporate raider conducts asset stripping because he believes that selling some of the assets will both repay the debt and leave the raider with enough extra assets to increase its net worth. In the process of deciding which companies to acquire, asset strippers look for companies worth more as individual assets than as companies.

asset stripping

The sale of selected assets of an acquired company generally for the purpose of raising money to pay off some of the debt incurred in financing the acquisition.
References in periodicals archive ?
Private equity managers will face limits on the amount of capital they can distribute for a specified period after they take over a company, to prevent asset stripping
And he insisted this was not an exercise in asset stripping, but a business plan to take the stadium, Wrexham FC and the Crusaders rugby league club forward.
The remaining issues for Parliament are asset stripping - the practice where private equity firms swoop in on ailing companies only to dismantle them and sell them off at a profit - and passive marketing - where investors contact managers rather than the other way around.
The agency said that recoveries were poor because of an unpredictable bankruptcy regime, Russia's political and business conflicts, asset stripping, uncertain shareholder support and risky credit profile of the banking sector.
Private equity brings "a lot of benefits" to the UK economy, Tony Blair insisted yesterday as unions escalated protests against alleged asset stripping.
The consortium, believed to be headed by former Bradford chairman Geoffrey Richmond, insist they have the best interests of the club at heart and issued a statement of their own to pacify fans concerned at the potential for asset stripping.
Everyone needs help in these hard economic times, not a form of personal asset stripping for no worthwhile purpose.
We're dyed-in-the-wool fans who believe Murray is asset stripping Rangers into obscurity.
They have made their fortune from the private equity business - asset stripping by any other name.
Labour is braced for controversy this week when it discloses receiving major donations from three financiers amid the row over corporate asset stripping.
Be truthful to us - you are asset stripping," he said.
Labour must show faith with its electorate by ruling out this asset stripping exercise that will degrade the environment for the citizens of North Cardiff.