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 ?
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.
At the macro level, the goals of the program are fairly simple: to maximize marginal return on recapped components; to increase unscheduled mean time between removal (MTBR) for selected recapitalized components by 20 percent; and to reduce average fleet life to 10 years by 2010.
Discussions about merging BIF with a recapitalized SAIF and sharing the FICO interest obligation among the members of both deposit insurance funds raise the question of retaining separate bank and thrift charters.
However, as of this date no formal agreements or terms have been agreed upon to recapitalize the Company and it is doubtful that it will be recapitalized.
a closely held corporation, was successfully recapitalized in 1983.
The merging of a recapitalized SAIF with a sound BIF would then consolidate the FICO bond obligation of SAIF into the new insurance fund and effectively obligate past BIF members to participate on a pro rata basis.
The refinance proceeds retired existing debt and recapitalized the partnership.
5% of their outstanding shares and will retain the remainder of their shares in the recapitalized LCA, with the allocation to be made pursuant to the previously announced election and proration provisions.
Trump would exchange his right under the Plan to receive the former World's Fair Site in Atlantic City, New Jersey for additional equity in the recapitalized Company, which would bring Mr.
have recapitalized 485 Lexington Avenue, the 921,000 s/f midtown Manhattan office property they bought in July 2004.