We assist in extensive planning, formulating and execution of various restructuring strategies. Corporate restructuring strategies are determined on the basis of nature of business, type of diversification required and results in profit maximization through pooling of resources in effective manner, utilization of idle resources, effective management of competition etc. There are various types of corporate restructuring strategies as under:
- Reverse Mergers
- Joint ventures
- Strategic Alliance
- Slump Sale
Some of the prominent strategies are discussed as under:
- Mergers & Acquisition, De-mergers of Companies: The laws governing merger & Acquisition are laid down in Chapter XV Section 230-240 of the Companies Act, 2013. It is a process of coming together, “joining hands” for companies with a common objective. For a merger & acquisition to be a successful one thorough Due-diligence is a must, followed by arriving at definite agreement, negotiations, valuation, strategic decision makings, taxation aspects and execution of transaction. Application for M&A has to be approved by NCLT and a subject to approval of tribunal it is executed.
- Demerger is a reverse of merger, i.e, parting or split of joint companies. Demerger is done in situations where company wants to focus on certain core objects, retain a certain segment and do off with rest.
FAST TRACK MERGERS – For certain companies as per section 233 of the Act fast track mergers are available which by-passes the normal procedure and is cost-effective.
Without an expert guidance M&A procedures can take very long and several years to complete. However it can be completed within a years time or even 6 months in some cases.
Takeovers : Takeover is a kind of acquisition where acquiring company assumes control over the target company. The laws relating to takeover are governed both by Companies Act, 2013 (Section 186, Section 235-236) and Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SEBI Takeover Code).
There are a number of statutory conditions to be fulfilled to proceed with Takeovers and thorough due diligence, strategic planning and negotiations are an integral part of the process.
Post restructuring requirements: Post Restructuring requirements envisages actions which the management of company has to take after the restructuring is executed and encompasses the reorganization of each and every aspect of the company’s functional areas to achieve the objectives planned and aimed at from such restructuring. General points to be considered include:
- Change of Name and Logo
- Aligning Company Policies
- Reporting with Statutory Authorities
- Record Keeping
- Revised certification requirements
- Drafting Contracts for new policies and rules
- Revising organization hierarchy etc.