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 ?
The 2016-17 budget package includes $75 million to recapitalize the Business in Our Sites program to allow Pennsylvania to compete for business expansions and relocations by providing patient capital to create shovel-ready sites for business development.
"Providing a credible back stop to recapitalize weaker segments of the banking system has been a key recommendation of the IMF's recent Financial Sector Assessment Program (FSAP) conducted in Spain", she added.
BRUSSELS: The European Union has agreed that around 100 billion euros ($136.9 billion) is needed to recapitalize the European banking system, but splits remain before a high-profile summit Sunday over how to strengthen the eurozone's bailout fund.
The news reports cited analyst estimates that private equity firms could provide up to $50 billion to recapitalize banks.
The financial market turmoil is not over because measures to recapitalize struggling bond insurers are widely viewed as insufficient, a U.S.
Facilities have been aging and deteriorating as funds needed to sustain and recapitalize the facilities have fallen short of requirements.
"The MH-60S is the first building block in a 20-year plan to recapitalize our helicopter force," Capt.
The company also said it continues to search for alternative ways to recapitalize its long-term debt.
The carrier's acting chairman, Jim Farmer, welcomed the share price announcement and said the ''price represents an appropriate level for this major investment, which will recapitalize the company.''
I am pleased to be able to appear here today to offer my thoughts on the proposed legislation to recapitalize the Savings Association Insurance Fund (SAIF), to merge SAIF and the Bank Insurance Fund (BIF), and to merge the thrift and the commercial bank charters.
In response to this threat, management has considered several defensive measures and has decided to recapitalize and implement poison pill provisions.
Oshkosh Defense, LLC, an Oshkosh Corporation company, will recapitalize 1,212 Family of Heavy Tactical Vehicles (FHTV) and produce 345 trailers following multiple orders from the U.S.