Asset Restructuring is the process of purchasing or selling a company’s assets that account for significantly more than fifty percent of the target company’s consolidated assets. When a business undergoes reorganisation, there is typically a one-time expense that must be covered. Asset restructuring is a cost that may be incurred during the entire process of strategically writing off its assets or moving the complete production facility to a new place, closing the manufacturing facilities, and laying off all non-strategic staff. In this article, asset restructuring, we take a look at the process involved and the options available to you.
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What Are The Reasons Why A Company Would Consider Restructuring Its Assets?
Asset restructuring could be undertaken for a variety of reasons, including positioning the company to move into a completely new area, making the organisation more competitive, or surviving and thriving in the current difficult economic environment.
How is Asset Restructuring implemented?
During a significant change, for example a bankruptcy or a buyout, the company’s management may consider strategic asset restructuring. Asset restructuring may involve a number of actions to eliminate diseconomies of scale, such as streamlining and reorganising the core activities and management, and consolidating the management teams of new owners or buyers. Asset Restructuring could involve new financing, new management, and any new opportunity to rethink the business strategy and organisation. A successful asset restructuring would often result in an increase in the company’s valuation.
Why is Asset Restructuring Important?
A business that has been strategically restructured, primarily through asset restructuring, is, at least provisionally, more profitable, more efficient, and more operation-focused. However, asset reorganisation may have an impact on existing shareholders’ stock values and may even cause a decline in their holdings.
The basic purpose of asset reorganisation is to increase shareholder value. In addition to this, other factors include:
- Variations in the competitive environment.
- There may be a rapid shift in technology and a global expansion of competitive forces as a result of intense international competition.
- The company’s management may elect to restructure its assets in order to sharpen its emphasis on core skills through strategic disposal of non-essential operations, which could result in improved valuations.
What Are The Advantages of Asset Restructuring?
After reorganising its primary non-core and non-lucrative assets, the company’s operation would become attractively integrated and extremely profitable. The majority of the company’s legal and financial experts are hired for strategic plan and contract drafting and also to facilitate negotiation.
Asset restructuring must result in significantly more efficient and profitable business operations than the sale of non-strategic assets. In turn, it is anticipated that the acquisition of a number of other substantial assets essential for expanding business operations will continue to result in long-term, sustainable company growth and excellent shareholder returns.
Asset Restructuring Fees
The process of asset restructuring incurs costs for the company, including those associated with the write-off of assets, the reduction or elimination of service or product lines, the termination of agreements, the elimination of divisions, and the closure of sites. In addition, the acquisition of essential properties increases the overall cost of asset restructuring.
How we can help
We have a proven track record of helping clients deal with the process involved in asset restructuring. We will guide you diligently and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting. You can read more about the range of corporate services we offer by clicking here: https://blackstonesolicitorsltd.co.uk/corporate-legal-services/
How to Contact Our Corporate Solicitors
It is important for you to be well informed about the issues and possible implications of asset restructuring. However, expert legal support is crucial in terms of ensuring your business is set up correctly.
To speak to our Corporate solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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