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 ?
Here, equity in a recapitalized iHeart is also a sticking point, with iHeart offering 0.25% less.
To meet HEMTT A4 configuration requirements, recapitalized vehicles will receive improved suspension systems, a fully air-conditioned and armor-ready cab, and a more powerful drive train.
The corporation is recapitalized to create a new class of nonvoting common stock with the same distribution and liquidation rights as the outstanding voting stock.
"With Amey's retirement, the company recapitalized," says Jim Amanna, corporate communications director of RSIS.
The rescue plan, in which Air New Zealand is to be recapitalized in a two-phase cash injection from the government, was announced Oct.
After the transfer, the corporation recapitalized and exchanged the trust's common stock for preferred stock.
The merging of a recapitalized SAIF with a sound BIF would then consolidate The Financing Corporation (FICO) bond obligation of SAIF into the new insurance fund and effectively obligate past BIF members to participate on a pro rata basis.
The recapitalization plan that the company has chosen enables the public shareholders to receive $14 in cash, a high-yield bond worth $6, and one new share (the "stub") in the recapitalized entity valued at $14.
has been recapitalized by Arsenal Capital Partners, the company said.
That is why Oshkosh recapitalized vehicles are assembled on the same production line as new vehicles, and complete the same extensive performance tests and inspection procedures as new vehicles.
Only a year later, Tishman Speyer recapitalized the building based on a $335 million valuation of the property, over 40% more than what they had paid.
* Upgrade all operator and maintainer training systems to the recapitalized configuration.