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.
Austria's Finance Minister Maria Fekter said there was talk about forcing banks to recapitalize, although she said she was not in favor of such a move.
The news reports cited analyst estimates that private equity firms could provide up to $50 billion to recapitalize banks.
Matsushita Investment & Development envisions asking creditor banks to help recapitalize it further, they added.
The money is expected to recapitalize the SAIF to prepare it for a merger with the Bank Insurance Fund (BIF) by 1999.
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.
In contrast to governmental actions taken by the United Kingdom and some other European nations to recapitalize troubled banks in their domain by taking equity stakes in the banks, the US government has begun the process of recapitalizing US banks by taking preferential yet nonvoting equity stakes in a handful of financial institutions.
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.
Governor Panicos Demetriades said that banks which took huge losses on Greek debt and loans would need 'less than EUR10bn' to recapitalize, even in the worst-case scenario.
Will your credit union be willing to recapitalize your corporate/primary corporate?
230 billion bridge loan that the company said it would use to recapitalize its previous $1 billion credit facility and repay term loans and fund certain property level debt.