Restructuring an enterprise and its debts as methods of recovery

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:47

Restructuring of an enterprise is a process that provides timely and flexible changes in the structure of an enterprise, adapting it to the influence of changeable external and internal factors. The structure of the enterprise, corresponding to the updates, will be stable. And others are waiting for the process of degradation, destabilization and, as a result, the same restructuring, but already in the form of bankruptcy or reorganization.

Restructuring of an enterprise in each individual case is carried out using an appropriate approach. Not only the situation at the enterprise is taken into account. The state of the industry, the market for relevant services and goods is also taken into account. It is important to correctly diagnose "diseases" that impede fruitful activity, and to identify the degree of neglect. Only then can the right development strategy be worked out and restructuring planned.

Enterprise restructuring is a process that is carried out in two main stages.

The first stage includes carrying out organizational activities, solving administrative issues, implementing propertyrestructuring. The types of activities are being optimized, the structure of the organization is changing, the mobilization and redevelopment of the concentration of resources and finances is taking place. As a rule, large financial expenses are not expected during this period. The measures taken make the company ready to start the second, more difficult stage of the restructuring.

During the second stage, the restructuring of the enterprise is carried out in the form of changes in the ownership structure (but not necessarily), and the restructuring of finances, investments in fixed capital, and labor resources is also carried out. During this period, significant capital investments are required for the implementation of investment projects.

It is worth noting that the restructuring of an enterprise is not complete without one of the stages, both are inseparable and have a certain order.

But don't relax when the restructuring is over. This is just the beginning of a new phase in the development of the enterprise. In diagnosing the need for restructuring, monitoring of the competitive market and the financial situation in the enterprise will help. The conclusion suggests itself: when the restructuring of the enterprise is completed, one should prepare for the next one.

Given the shortage of capital of enterprises, the issues of debt management - both receivable and payable - are relevant. Lack of attention to the management of debt structures can lead even well-to-do companies to the stage of bankruptcy. To improve the financial condition, it would be expedient to restructure the company's debt. The right strategy at the same time will provide the investment, financial and operating activities of the company with sufficient finance. Therefore, the restructuring of the company's debt is consistent with the following goals and directions:

- limited and accelerated growth (subject to stable competitiveness);

- activity reduction;

- combination (subject to broad industry diversification).

Main tasks of debt restructuring: analysis of receivables, liabilities, performance indicators of the debt management process to identify trends in the appearance and repayment of debts; development of measures to improve the efficiency of using the company's debts.