A STUDY ON CORPORATE RESTRUCTURING WITH SPECIAL

REFERENCE TO MYFINO PAYMENT WORLD (p) LTD

 CHAPTER-I

1.1 ABOUT THE STUDY

CORPORATE RESTRUCTURING

Corporate restructuring is the process of redesigning one or more aspects of a

company. The process of reorganizing a company may be implemented due to a number of
different factors, such as positioning the company to be more competitive, survive a currently
adverse economic climate, the corporation to move in an entirely new direction.

Corporate restructuring is that, ―To give a new structure, to rebuild or rearrange‖.

McKinley: Restructuring is the corporate management term for the act of reorganizing the
legal, ownership, operational, or other structures of a company for the purpose of making it
more profitable or better organized for its present and future needs. Alternate reasons for
restructuring include a change of ownership or ownership structure, demerger, or a response
to a crisis or major change in the business such as bankruptcy, repositioning, or buyout

Corporate Restructuring is an episodic exercise not related to investment in new plant

and machinery which involve a significant change in one or more of the following.

 Pattern of ownership and control

 Composition of liability
 Asset mix of the firm

Restructuring a corporate entity is often a necessity when the company has grown to
the point that the original structure can no longer efficiently manage the output and general
interests of the company. For example, a corporate restructuring may call for spinning off
some departments into subsidiaries as a means of creating a more effective management
model as well as taking advantage of tax breaks that would allow the corporation to divert
more revenue to the production process.

In this scenario, the restructuring is seen as a positive sign of growth of the company.
In general, the idea of corporate restructuring is to allow the company to continue functioning
in some manner. Even when corporate raider‘s breakup the company and leave behind a shell
of the original structure, there is still usually a hope, what remains can function well enough
for a new buyer to purchase the diminished corporation and return it to profitability.
Purpose of corporate restructuring

 To improve the share holder value, the company should continuously evaluate
its
1. Portfolio of businesses
2. Capital Mix
3. Ownership
 Asset arrangement to find opportunities to increase the share holder value.
 To focus on asset utilization and profitable investment opportunities.
 To reorganize or divest less profitable or loss making business
 The company can also enhance the value through capital restructuring. It
enhance innovate securities that help to reduce the cost of capital.

Characteristic of corporate restructuring

 To improve the company‘s balance sheet, (by selling unprofitable division

from its core business.
 To accomplish staff reduction (Selling and closing from its core business)
 Changes in corporate management.
 Outsourcing of function such as payroll and technical support to a more
efficient third party.
 Renegotiation of labor contracts to reduce overhead
 Refinancing of corporate debt to decrease interest payments
Today, restructuring is the latest buzzword in corporate circles. Companies are vying
with each other in search of excellence and competitive edge other in search of excellence
and competitive edge, experimenting with various tools and idea many firm try to turn the
business around by cutting jobs, buying companies, selling off or closing unprofitable
divisions or even splitting the company up. And the changing national and international
environment is radically changing the way business is conducted. Moreover with the pace of
change so great, corporate restructuring assumes paramount importance. It is because
profitable growth is one of the objectives of any business firm .Maximization of profit is
possible either by internally, by change of manufacturing process, development of new
products. On other hand company would be able to maximize profit by externally merging
with other firm or acquiring another firm. The external strategy of maximizing profit may be
in the form of mergers, acquisitions, amalgamations, takeovers and so on.
 It requires organizations to constantly reconsider their organizational design and
structure, organizational system and procedure, formal statement on organizational
philosophy and may also include values, leader norms and reaction to critical incidents,
criteria for rewarding, recruitment, selection, promotion and transfer.

Category of corporate restructuring

Corporate restructuring involve a forms of activities including financial restructuring,

organization restructuring

Financial restructuring
Financial restructuring is the restructuring of the financial assets and liabilities of a business
in order to make the most beneficial financial environment for the corporation. The process
of financial restructuring is often related with corporate restructuring, in that restructuring the
general function and work of the business is likely to impact the financial health of the
company. When completed, this reorganizes of corporate assets and liabilities can help the
company to remain competitive, even in a low economy. Just about every business goes
throughout a stage of financial restructuring at one time or another. In some cases, the
procedure of restructuring takes place as a means of allocating resources for a new marketing
movement or the launch of a new product line. When this happen, the restructuring is often
viewed as a sign that the business is financially stable and has set goals for future growth and
development.
Organizational restructuring
Organizational restructuring has become a very common practice amongst the firms in order
to match the growing competition of the market. This makes the firms to change the
organizational structure of the company for the betterment of the business. Some of the prime
reasons for organizational restructuring are as follows: Changing nature of the markets, the
continuous innovations in technology, product, and work processes materials, organizational
culture and structure and also various actions of work force values, global competitors,
demands and diversity, Ethical constraints and regulations, Individual transition and
development of the business
 1.2 INDUSTRY PROFILE

Money and the idea of its exchange through payments have evolved a lot from the
time of its inception. From goods to grain, from metal coins to paper, from bank accounts to
e-wallets, money has taken various shapes, sizes, and forms. Payments evolved from a barter
system (exchange of goods for grains) to the token system (exchange of coins and cash on
paper) to cash pooling (bank accounts and deposits) to cashless payments (credit cards,
checks, e-wallets). Over the last decade or so, payment technologies have grown at a dizzying
pace.

Payments are now evolving at a rapid pace with new providers, new platforms, and
new payment tools launching on a near-daily basis. As consumer behavior evolves, an
expectation of omnicommerce emerges – that is the ability to pay with the same method
whether buying in-store, online, or via a mobile device. This shift precipitates a need for
retailers to adapt toward fast, simple, and secure mobile payments.

The payments industry would be in a transformational state in 2017. The ongoing war
with alternative payment channels will intensify and challenges in emerging markets would
force the incumbents to take drastic measures. Some key drivers would be:

1. Real-Time Payments: RTP represents a new phase of evolution within the payments
industry, with several key features that differentiate them from current payment methods,
specifically speed, value-added messaging capabilities, and immediate availability of
transaction status. RTP will provide FIs with the functionality/features to innovate and meet
customer demand.

2. Distributed Ledger Technology (DLT)/Blockchain: Blockchain has the potential to

completely change the financial transaction processing cost model amongst its various
applications. It also enables all processing to be done over a distributed system network or in
the cloud, avoiding the usage of costly data centers or mainframes.

3. Expansion of Payments to Non-Physical Interfaces: Traditional interfaces are

challenged by external stakeholders (Amazon, Google, Facebook, and Apple) in two ways –
voice assistants and VR. Connected assistants become smarter and add functionality with the
enhancement of NLP and image recognition. Betting on physical interfaces, and mobile, in
particular, can no longer ensure long-term relevance as voice-first solutions evolve. With
Facebook obsessed with killing the smartphone to own virtual spaces, classic interfaces and
solutions developed for them will gradually fall out of grace.

4. Unified Platforms: The first Visa/Mastercard/SWIFT-free payments system – the Unified

Payments Interface (UPI) by NPCI was launched in 2016. UPI is an open-source platform
designed for the mobile age that helps with the easy integration of various payment
platforms. UPI is powered by a single payment API and a set of supporting APIs. UPI offers
a whole new model of the financial services industry ecosystem. UPI became a starting point
of what SWIFT called a journey to a single payments platform. UPI is a benchmark to what
the payments landscape should be moving towards given that oversaturated payments
ecosystem, where too many ‗pay‘s‘ won‘t let anyone win. Disjoint experiences across
businesses create customer confusion, and, in the end, with a limited customer base, limit
opportunities for every payment service provider – existing and new. Professionals from
SWIFT emphasize that the payments industry must migrate from a plethora of aging and
expensive systems and schemes to a single platform to process all payments. However, a
single payment experience for customers (based on seamless system interoperability,
comparable to mobile telephony) is a more probable future than a single payments platform.

Participants

Pay1.png

Source: Overview of the Payments Ecosystem – Electronic Transactions Association

Channels

Here are three main payment channels based on market participants and underlying
funding mechanisms:

B2C

C2C

B2B
 Regulation, demographics, and technology are affecting B2C and B2B in various
ways. Technology is most actively shaping C2C payments while B2C and C2B have not been
left behind with technology partnerships mushrooming across banks, enterprises, and
startups. C2C payments have the highest potential to evolve as a result of several factors:

Convenience and ease of use

Lack of entrenched counterparties such as businesses, which are typically much slower to
adopt new business processes

Lack of stickiness for incumbent service providers such as offers and rewards

Processors for the payment systems can use different channels to make a payment and each
has different operating characteristics, rules, and settlement mechanisms. All payment
systems can be broadly placed into one of the following four payment channels:

Paper-Based systems such as checks or drafts. Payments are initiated when one party
writes an instruction on paper to pay another. These systems are one of the oldest forms of
non-cash payment systems. Checks are a common paper-based channel and are still widely
used in the United States and a few other countries.

RTGS (Real Time Gross Settlement) or High-Value Payments, commonly called wire
transfers. Wires came into being in the late 1800s with the invention of the telegraph but did
not become widely used until the early 1900s.

RTNS, or Real Time Net Settlement systems or Automated Clearing House (ACH) batch
payments were introduced in the early 1970s and were designed to replace checks with
electronic payments. Unlike wires, which are processed individually, ACH payments are
processed in batches and were originally intended for small payments under $100,000 such as
payroll and consumer transactions.

Cards are a payment channel that includes credit, debit, and stored-value cards. They are a
fast-growing segment of the methods for making and receiving payments.

Mobile payment is defined as the use of the mobile phone to pay for the purchase of goods
and services at a retail POS terminal or on the Internet. Payment may be initiated via SMS
text message, mobile browser, downloadable app, contactless near-field communication
(NFC), or quick response (QR) code. As more and more smartphone owners use their devices
to pay for products online, mobile payment services are predicted to grow rapidly. At the
same time, the emergence of one-touch checkout buttons, P2P payments, and the rise of
sharing economies have created new opportunities for remote mobile payments.

Real-Time Low-value payments provide consumers and businesses with the ability to
conveniently send and receive immediate fund transfers directly from their accounts at FIs,
anytime 24/7/365. Financial institutions can leverage a variety of features – enhanced speed,
security, and messaging capabilities – to create unique offerings for their retail and corporate
customers. RTP also provides a backbone on which new business models can be redefined.

Payments Schemes

Pay-2.png

Source: What does the payment ecosystem look like?, Ecommerce Foundation

OBeP Scheme

The Online Banking ePayments (OBeP) scheme is a type of payments network, developed by
the local or international banking industry – in conjunction with technology providers –
designed to facilitate online bank transfers or direct debits.

In an OBeP scheme, the consumer is authenticated in real-time by the consumer‘s financial

institution‘s online banking infrastructure. The availability of funds is validated in real-time
and the consumer‘s financial institution provides a guarantee of the payment to the merchant
in case the payment is made as a credit transfer (push payment): the consumer/buyer initiates
the payment. In case the merchant initiates the payment – a debit transfer (pull payment) –
the consumer is protected from wrong debits and has the right to reverse the payment
depending on scheme regulation and market legislation.

OBeP schemes often allow for direct merchant integration and do guarantee payment to
merchants. Other benefits are the relatively low transaction cost compared to card, wallet, or
other alternative payments.

OBeP Types

Across markets, there are several OBeP scheme types to distinguish:

Mono-Bank OBeP Scheme: Entails that a seller or Payment Service Provider has a separate
connection to each participating financial institution.

Multi-Bank OBeP Scheme: Entails that a seller or Payment Service Provider has one single
connection to the OBeP network in order to accept payment from any participating financial
institution (Ex.: the iDEAL scheme in the Netherlands and BankAxess in Norway)

Overlay OBeP Scheme: Similar to the Multi-Bank or Mono-Bank scheme, however, there is
a third party (the overlay provider) who sits between the payment network and the consumer.
The overlay provider requires the consumer to share their online banking credentials with
them in order to have access to the consumer‘s bank account and to initiate the credit transfer
to the merchant. (e.g. SOFORT banking, or SOFORT Überweisung)

Three-Party Model

A three-party scheme consists of three main parties whereby the issuer – who has the
relationship with the cardholder – and the acquirer – who has the relationship with the
merchant – is the same entity. The three parties consist of the consumer, the merchant and the
scheme.

Often the three-party model is a franchise set-up, whereby there is only one franchisee in the
market. There is no competition within the brand; however, there is competition with other
card brands and other alternative payment methods. Some examples of three-party card
schemes: Diners Club International, Discover, and American Express.

In the last few years, these schemes have also partnered with other issuers and acquirers to
ensure the issuance and acceptance of their card brand. These schemes could be seen as
‗premium‘ card schemes as they tend to have a strong cardholder focus and to provide
additional privileges for cardholders. Merchants are often charged a relatively high merchant
commission rate.

Four-Party Model

In a four-party scheme, the issuer – who has the relationship with the cardholder – and the
acquirer, who has the relationship with the merchant, are different entities. The four parties
consist of the consumer, the merchant, the issuer, and the acquirer. These four-party schemes
are referred to as ‗open schemes‘ as they allow banks and financial institutions to join, to start
issuing their cards, and/or to acquire merchants for card acceptance. In principle, there is no
limitation to who may join the scheme, as long as the scheme requirements are met. Some
examples of a three-party card scheme: Mastercard, Visa, Maestro, UnionPay, JCB, and
RuPay (India).

Capital Market is one of the significant aspects of every financial market. Hence it is
necessary to study its correct meaning. Broadly speaking the capital market is a market for
financial assets which have a long or indefinite maturity. Unlike money market instruments
the capital market instruments become mature for the period above one year. It is an
institutional arrangement to borrow and lend money for a longer period of time. It consists of
financial institutions like IDBI, ICICI, UTI, LIC, etc. These institutions play the role of
lenders in the capital market. Business units and corporate are the borrowers in the capital
market. Capital market involves various instruments which can be used for financial
transactions. Capital market provides long term debt and equity finance for the government
and the corporate sector. Capital market can be classified into primary and secondary
markets. The primary market is a market for new shares, where as in the secondary market
the existing securities are traded. Capital market institutions provide rupee loans, foreign
exchange loans, consultancy services and underwriting.

Let us get acquainted with the important functions and role of the capital market.

1. Mobilization of Savings: Capital market is an important source for mobilizing idle

savings from the economy. It mobilizes funds from people for further investments in
the productive channels of an economy. In that sense it activate the ideal monetary
resources and puts them in proper investments.
2. Capital Formation: Capital market helps in capital formation. Capital formation is
net addition to the existing stock of capital in the economy. Through mobilization of
ideal resources it generates savings; the mobilized savings are made available to
various segments such as agriculture, industry, etc. This helps in increasing capital
formation.
3. Provision of Investment Avenue: Capital market raises resources for longer periods
of time. Thus it provides an investment avenue for people who wish to invest
resources for a long period of time. It provides suitable interest rate returns also to
 investors. Instruments such as bonds, equities, units of mutual funds, insurance
policies, etc. definitely provides diverse investment avenue for the public.

4. Speed up Economic Growth and Development: Capital market enhances

production and productivity in the national economy. As it makes funds available for
long period of time, the financial requirements of business houses are met by the
capital market. It helps in research and development. This helps in, increasing
production and productivity in economy by generation of employment and
development of infrastructure.
5. Proper Regulation of Funds: Capital markets not only helps in fund mobilization,
but it also helps in proper allocation of these resources. It can have regulation over the
resources so that it can direct funds in a qualitative manner.
6. Service Provision: As an important financial set up capital market provides various
types of services. It includes long term and medium term loans to industry,
underwriting services, consultancy services, export finance, etc. These services help
the manufacturing sector in a large spectrum.
7. Continuous Availability of Funds: Capital market is place where the investment
avenue is continuously available for long term investment. This is a liquid market as it
makes fund available on continues basis. Both buyers and seller can easily buy and
sell securities as they are continuously available. Basically capital market transactions
are related to the stock exchanges. Thus marketability in the capital market becomes
easy.

Investment services in Myfino Payment world Pvt Ltd

Investment has different meanings in finance and economics. Finance investment is

putting money into something with the expectation of gain that upon thorough analysis has a
high degree of security for the principal amount, as well as security of return, within an
expected period of time. In contrast putting money into something with an expectation of
gain without thorough analysis, without security of principal, and without security of return is
speculation or gambling. As such, those shareholders who fail to thoroughly analyze their
stock purchases, such as owners of mutual funds, could well be called speculators. Indeed,
given the efficient market hypothesis, which implies that a thorough analysis of stock data is
irrational, all rational shareholders are, by definition, not investors, but speculators.

Investment is related to saving or deferring consumption. Investment is involved in many

areas of the economy, such as business management and finance whether for households,
firms, or governments. To avoid speculation an investment must be either directly backed by
the pledge of sufficient collateral or insured by sufficient assets pledged by a third party. A
thoroughly analyzed loan of money backed by collateral with greater immediate value than
the loan amount may be considered an investment.

Automatic investment plan (AIP)

It is the investment for every month or quarter. Then on the day of your choice, that
amount is automatically transferred from your checking or savings account. Investments must
be in amounts of $100 or more. There is no additional fee for this service and you can
terminate it at any time.

Systematic withdrawal plan (SWP)

The systematic withdrawals of $50 or more on a monthly or quarterly basis. The

proceeds of the withdrawal plan can be sent to your address of record, sent by electronic
transfer to your bank or invested in another Wright fund. This is a useful way to deal with
mandatory withdrawals from an IRA.

Commodities in Myfino Payment world pvt Ltd

Commodity markets are markets where raw or primary products are exchanged. These
raw commodities are traded on regulated commodities exchanges, in which they are bought
and sold in standardized contracts.

This article focuses on the history and current debates regarding global commodity markets.
It covers physical product (food, metals, and electricity) markets but not the ways that
services, including those of governments, nor investment, nor debt, can be seen as a
commodity.
 1.3 COMPANY PROFILE

Myfino Payment world pvt Ltd, incorporated in 18th October of the year 2005 as
Probity Research & Services Private Limited at Salem. The Myfino Payment world is a one-
stop shop for information, advice as well as transaction execution of financial services. MPL
along-with its subsidiaries caters to entire gamut of financial services including equities and
commodities broking, portfolio management, distribution of mutual funds, life insurance
products, home loans, personal loans, etc. Broking services are offered under the 5paisa
brand (offers broking services in the Cash and Derivatives segments of the NSE as well as the
Cash segment of the BSE). The company has proven research capabilities and was rated by
the Forbes as the best of web' and must read for investors'. A network of 758 business
locations spread over 346 cities across India, facilitates the smooth acquisition and servicing
of a large customer base.

Myfino Payment world 's research is available not just over the Internet but also on
international wire services like Bloomberg (Code: MPL), Thomson First Call and Internet
Securities where it is amongst the most read Indian brokers. The Company identified the
potential of the Internet to cater to a mass retail segment and transformed its business model
from providing information services to institutional customers to retail customers. Hence
MPL launched its Internet portal, www.myfinopaymentworld.com in May of the year 2009
and started providing news and market information, independent research, interviews with
business leaders and other specialized features.

In the year 2010, MPL leveraged its position as a provider of financial information
and analysis by diversifying into transactional services, primarily for online trading in shares
and securities and online as well as offline distribution of personal financial products, like
mutual funds and RBI Bonds.

These activities are carried on through the wholly owned subsidiaries. The broking
service was launched under the brand name of 5paisa through our subsidiary, Myfino
Payment world Securities Private Limited and www.5paisa.com, the e-broking portal, was
launched for online trading in June of the year 2000. It combined competitive brokerage rates
and research, supported by Internet technology. Besides investment advice from an
experienced team of research analysts, also offer real time stock quotes, market news and
price charts with multiple tools for technical analysis.

In December of the year 2010, Myfino Payment world Insurance Services Limited
(subsidiary) became a corporate agent for ICICI Prudential Life Insurance Company Limited.
In the year 2014, the company launched commodities broking through its subsidiary Myfino
Payment world Commodities Private Limited. Also received a license for Portfolio
Management Services from SEBI for broking subsidiary. During the year 2016, the company
received the requisite prior approval from

The Securities and Exchange Board of India for its proposed merger of Myfino
Payment world Securities Private Limited (IISPL), a wholly owned subsidiary with itself. It
had earlier received in-principle approval from National Stock Exchange and The Stock
Exchange, Mumbai. In January of the year 2017, the company entered into an alliance with
Bank of Baroda for providing Brokerage Platform, besides research and analysis services to
the bank's customers. Myfino Payment world awarded the Best Broker in India' by Finance
Asia. This was a result of Finance Asia's annual look at the best financial services firms in
each country around Asia for the period from June 2017 to May 2018. During March of the
year 2018, Myfino Payment world 's institutional broking arm MPFL, partnered with
Auerbach Grayson & Company, Inc., a New York-based brokerage firm to offer US investors
premium access to investing in India's capital markets. Auerbach Grayson specializes in
providing global trade execution and exclusive research to U.S. institutional investors. As of
July 2018, the company received the in-principle approval for the insurance broking license
from IRDA.

In today‘s competitive world there are many goods chasing few customers some are trying it
expands their size and share of existing market. As a result there are loser and winners.
Winner‘s are those who carefully analyze needs identify opportunities and create aloe rich
offers for target customer. The objective of the market research to determine the demand and
supply and use of the product and competitors s t u d y s o a s t o g e t t h e t o t a l m a r k e t
s c e n a r i o o f t h e p r o d u c t f o r a n a l yz i n g market problem research is needed. A firm
can obtained market research in a n u m b e r o f w a ys . I t c a n h i r e m a r k e t r e s e a r c h
f i r m o r i t c a n a s k s t u d e n t t o design and carry out market research project. These
marketing problems and opportunities if entrust to the student of marketing. Especially when
they seek the same during the project g i v e s o p p o r t u n i t i e s t o a p p l y t h e i r
t h e o r e t i c a l k n o w l e d g e a n d m a n a g e r i a l knowledge.

CHAIRMAN AND MEMBER OF SHARE : MR.NIRLMAL B.JAIN

MANAGING DIRECTOR : MR.R.VENKATARAMAN

CHIEF FINANCIAL OFFICER : MR.L.P AGGARWAL

CHIEF OPERATING OFFICER : MR.NARENDRA JAIN

Business Operation : Finance - Stock Broking

1.4 OBJECTIVE OF THE STUDY

 To study the corporate restructuring Myfino Payment world pvt Ltd investment
services and commodities.
 To estimate the Bankruptcy and Buyout of the companies.
 To estimate the Equity-carve out of the companies.
 To analyze the financial position using the ratio analysis.
 To study the price movements of stocks in Myfino payment world investment
services and commodities.
1.5 SCOPE OF THE STUDY:

 The scope of the study carried out at Myfino Payment world pvt Ltd to analyze
the financial report and the Ratio analysis over the past 5 fiscals.

 The scope of corporate restructuring encompasses enhancing economy and

improving efficiency.

 The company needs to restructure itself and focus on its competitive advantage.

 It is concerned with arranging the business activities of the corporate as a whole

so as to achieve certain things.

 The main intention of maintaining corporate restructuring in the firm is to

achieve the financial soundness and better organized for its present and future needs
to change the capital structure in the business.
1.6 LIMITATIONS OF THE STUDY:

 The study depends upon the data provided by the firm.

 A corporate restructure is often associated with a failing business model or

major job cuts.

 Restructuring often causes employees to panic and wonder how the changes will
affect their job security.

 The techniques used to calculate lack standard values therefore scientific

analysis is not possible.

 The study depends on the secondary data.

 CHAPTER-II

REVIEW OF LITERATURE

ROBERT E.HOSKISSON & THOMAS A.TURK (TEXAS A &M UNIVERSITY)

Corporate restructuring, In turn, is likely to a)result in the correction of inadequate

governance patterns, b) create a more focused diversification strategy ,c) Increase strategic
control d) reduce reliance on bureaucratic control through reduced corporate staff and
e) Increase the performance of the firm and shareholder wealth.

Michael C. Jensen, American Economic Review 76 (1986)

After all, the traditional view of economists has been that the investment policy of the
firm should be independent of its choice of financial structure; one implication of this
theoretical result is that the R&D policy of a firm should be unaffected by its choice of
leverage. Yet it is clear that many economists and businessmen believe that the increases in
debt-equity ratios which are typical of the corporate restructurings and acquisitions of the
present day put pressure on the firm to use its cash flow to service the long term debt at the
expense of investments, particularly those of a long term nature such as R&D. The argument
is that substituting debt for equity substitutes a fixed interest obligation for the optional
dividends which were formerly paid to shareholders, thus leaving the discretionary spending
of earnings vulnerable to downturns in the industry or economy.

This argument, while superficially persuasive, has several obvious problems; first, if
good (high payback) investment projects are available; the firm should be able to finance
them by going again to the equity or debt markets when retained earnings are not available.
The source of financing for these projects should have nothing whatever to do with whether
they are undertaken. Second, if the merger, acquisition, or LBO truly causes good projects to
be canceled, the firm should be worth less under the new ownership form, and the
shareholders should not have accepted an offer which reflects this lower value, or conversely,
the buyers should not have been willing to offer more than the current trading price.
McKinley and Scherer (2000), Gibbs (1993), Jensen (1986), Hokinson and Turk's (1990)

It defined restructuring as any major reconfiguration of internal administrative

structure that is associated with an intentional management change program. According to
Gibbs (1993), there are three types of corporate restructuring transactions, namely 1)
financial restructuring including recapitalizations, stock repurchases, and changes in capital
structure; 2) portfolio restructuring involving divestment and acquisitions and refocusing on
core businesses, resulting in change of the diversity of business in the corporate portfolio; and
3) operational restructuring including retrenchment, reorganization, and changes in business
level strategies.

Gibbs (1993) believed that the restructuring is partially explained by free cash flow.
Free cash flow is a function of investment opportunity, operating cash flow, diversification,
financial leverage, and corporate governance. For a given value of a free cash flow variable
the likelihood of restructuring increases. Jensen (1986) also suggested that restructuring could
also be described as returning free cash flows to owners. The empirical work of Hokinson
and Johnson (1989) suggested that a significant amount of restructuring is associated with
high levels of diversification strategies. This finding was confirmed by Hokinson and Turk's
(1990) study which concluded that restructuring is primary directed at overcoming control
problems that are associated with diversification and that result in poor performance.

CORPORATE DEBT RESTRUCTURING TODAY FOR PROFITABILITY FOR

TOMORROW: Venus Vasquez

Article Source: http://EzineArticles.com/?expert=Venus_Vasquez

In today's rapidly changing economic landscape every company has to look at what they do,
how they do it, and what needs to be done to survive. For some companies, even the most
successful ones, cash flow has become a major issue. Often that cash flow issue stems from
your Accounts Payable. Now is the time to consider corporate debt restructuring.

People often recommend solutions such as bankruptcy for a struggling business. However
due to the 2005 bankruptcy law changes put into place; this choice has become much more
complicated and costly. The SBA estimates over 40,000 businesses close or file bankruptcy
each month in the United States and 3/4 fail due to cash flow or sales. During these tough
times freeing up cash could be the key to keeping your business from becoming a statistic.
Rather than talk about how you have to work on this while your creditors put their plan into
motion, call a trusted and experienced corporate debt restructuring company and let them put
a plan into action for you that will get your business back on track.
Corporate debt restructuring companies can help by getting your accounts payable under
control. When looking for a restructuring company is sure to ask to see examples of their
methods, work, and past savings. Experienced corporate debt restructuring companies can
help reduce accounts payables by up to 90% and release all future liabilities. Explore this
simple solution to your accounts payable crisis.

A good debt restructuring company can remove the burden from you and your company and
negotiate to get these accounts paid while allowing you to focus on making your business
successful. Finding a trusted corporate debt restructuring company that will also make sure
all paid accounts are finalized with no remaining balances or further hassles is key, and
should all be done with minimal upfront administrative fees and should have flexible billing
options uniquely structured to clients needs. This is what makes a trusted and experienced
corporate debt restructuring company unique.

The process is simple and good debt restructuring companies offer to start with a free
consultation to discuss your options, so why now restructure today for profitability for
tomorrow?

Let an experienced corporate debt restructuring company negotiate on your behalf, taking
away the daily stress of dealing with these collectors. Let them worry about your debt so you
can concentrate on your business. Put a plan into action today for your business and get on
the road to recapitalizing your balance sheet today.

Corporate Restructuring Companies - What Do They Do? - Barry Trevor

Article Source: http://EzineArticles.com/?expert=Barry_Trevor

Restructuring companies in the United Kingdom is fast becoming a common occurrence. The
media has exposed companies and their leadership to the public in such a way, that many
viewers feel they know the CEO's personally. Many companies are in the state of recovering
from mergers and acquisitions, hostile takeovers, insolvency, embezzlement, financial
scandals, political scandals and company restructuring. For the CEO whose task is to rebuild
his or her company's image and reputation without the qualified experts, the job can become
an even harder task. When a company is in recovery enlisting the services of the best
financial consultants is the first step to corporate restructuring.
What services will a company need in order to rebuild the company, stakeholders trust and
reputation?
1) A consultant with a comprehensive business plan to turn the company around.
2) Experts that can make the necessary introductions to banks or other lending institutions on
behalf of the company.

3) Assist in repairing the reputation of the company and ensuring stakeholder's confidence.
4) Providing the PR services to repair and rebuild public trust and confidence in the
company's restructuring efforts.

5) Assisting in the communication and negotiation between parties during the process of
mergers and acquisitions.

6) Providing the best investigative services when background checking individuals, business
competitors, financial institutions and other business services with due-diligence.
7) Providing assistance with growth expansion and expanding the company's brand nationally
and internationally.

8) Assisting with tax attributes preservation.

There are more benefits and services that a qualified business and financial consultant can
provide to a company in recovery and corporate restructuring. The area of Individual
Voluntary Arrangement (IVA), Debt Management Plan (DMP), bankruptcy or insolvency is a
complex issue. Many individuals and business organizations are in need of assistance
pertaining to the process of a possible bankruptcy. For some insolvency is necessary and for
others finding an alternative method to correcting the financial problems for a company, is
when a financial specialist is needed. As the laws are changed or modified so is the need for
the best consultants available. Regardless of the economic climate when it is time to change
the business model that a business has learned to operate from, hiring the experts with the
experience and a successful track record will make the transition from financial ruination to
financial recovery successful while instilling stakeholder's trust, public trust and overcoming
the media scrutiny.

Corporate restructuring can help restore, preserve and enhance the value of an organization.
You can get help from restructuring specialists who can advice you well on it.
CORPORATE FINANCE - THE NEED FOR RESTRUCTURING: Barry Trevor

Restructuring your business financially can be one of the most challenging times of
upheaval that you ever experience within a business. Money may already be tight at that point
in time, hence the need to restructure, but the best option is always to look ahead at your
business's finances and preempt what may happen next. Restructuring regularly and making
sure that the right money is going to the right places will help you to avoid getting into a bad
financial situation in the first place and this is, of course, desirable as once in a hole of debt it
easily escalates.

One time when a corporate finance specialist should be sought out is when trying to embark
on the financial restructuring of a company. It is important that someone who has experience
of the matter shows you the best options for you, as it is easy to make the wrong financial
decisions. If you have someone within your company to help you with this anyway then that
is excellent, but professional opinions are worth buying as they look at things purely in the
sense of what will be best for you.

The management teams have many different options when it comes to financial restructuring
and sometimes dramatic steps can and should be taken as they are appropriate and offer a
great longer term fix. Such steps include management buy-ins and buy-outs, corporate
mergers and other ways of permanent fundraising which will boost the money that you have
to inject into the various areas of your company.

It is important that you put the right amount of money into each part of your company to start
with though, as you do not want to have all of your money tied up in stock sitting in a
warehouse, but also want to get cheap offers on it because of bulk buying. Areas like this,
which can easily be tipped off balance, are the things you need to focus on before acquiring
new money, to make sure you are using what you have wisely. This is where outside help can
come in handy, as you may be blinded by what you think is right, whereas something else
would be a much better way to go.

If you keep a good check on finances, then hopefully you can continuously review the
financial structure, so no major restructures are needed, but if it does come to that, please do
make sure you get professional advice to make sure you make the best of what you already
have and not worsen your situation.
Corporate restructuring can help restore, preserve and enhance the value of an organization.
You can get help from restructuring specialists who can advice you well on it.

DIFFERENT FORMS OF CORPORATE RESTRUCTURING: Jennie Kakkad

Corporate restructuring or business restructuring has gained popularity with big and
small business houses across the globe. It has become an ideal strategy to meet the expansion
or contraction needs of an organization.

Organizations planning to expand their base resort to amalgamations, acquisitions, mergers,

asset purchases, joint ventures, and takeovers. They are all different forms of corporate
restructuring that bring together the resources of two businesses under a single umbrella.
They are considered synergistic in nature because they lead to greater benefits of economics
of scale, utilization of tax shelters, creation of a vast pool of assets, and the setting up of a
more efficient management.

Alternatively, contracting the business through divestitures, spinoffs and a splitups are other
forms of corporate restructuring. Here the focus is to remove a loss-making strategic business
unit in order to curtail business losses. Such ways are also preferred when organizations
strive for greater operational efficiency and want to concentrate more on areas that have
immense profit-generating potential.

A divestiture involves the sale of a division of an organization to another firm. It is a

contraction move from the seller's point of view. In a spinoff, a business unit is spun off into
a separate company having its own legal identity and a common seal. In a spiltup, a single
organization, which is a parent company, is broken into two or more independent
organizations.

A popular form of corporate restructuring is to raise funds from the general public via the
equity or debt route. This helps the company collate large amounts of funds that otherwise is
impossible via the private route. In this, the company brings out an initial public offer
inviting people to apply to its prescribed minimum number of shares carrying a fixed face
value. Moreover, the status of the company changes from private limited to public limited
after fulfilling a long list of legal formalities.
Alternatively, a public enterprise going private is also a form of corporate restructuring. It is
commonly known as privatization. In many developing countries, public sector was
established to take care of industries of strategic importance like steel, petroleum, and
defense. Over the passage of time, inefficiencies like bureaucracy and red tapism crept into
the system leading to continuous financial losses. Therefore, the government in these
countries started transferring ownership of their businesses into private hands.

The current business scenario has given birth to various types of business combination's and
corporate restructuring that is done with the key objective of achieving a competitive edge in
the market.
 CHAPTER-III

CHAPTER-III
RESEARCH METHODOLOGY

MEANING:

Research methodology is the way to solve the research problems. It may be

understood as a science of studying how research is done scientifically primary and
secondary data were made use of along with data collection are alone through questionnaire
and internet.

3.1 RESEARCH DESIGN

Research is the systematic and logical study of an issue or a problem to arrive at

accurate results. Research the job of collecting, recording and analyzing relevant data to
arrive at decisions. The present study is a systematic, objective and exclusive search for
studies of the facts relevant to a problem in the field of marketing. The search for the fact
may be through either(1)Unscientific method (2)scientific method

DESCRIPTIVE RESEARCH:

The study comes under the Descriptive research includes survey and fact finding
enquired of different kinds the major purpose of descriptive research is the descriptive of the
state of affairs as it exists at present.

3.2 SAMPLE DESIGN

Sample design depends on the researches objective and the nature of problem
samples are selected by using simple random sampling method.
3.3 DATA COLLECTION

Data constitute the foundation of the research. Hence the first step was to gather the
required data. The study was conduct at Myfino payment ,the data or information collected
from the various sources were divided in to two parts.

 Primary Sources
 Secondary Sources
PRIMARY DATA
The primary data means directly collected by the researcher himself or by investigator
appointed by him from the original sources.
QUESTIONNAIRE
A questionnaire is a printed list of question related to particular enquiry.
SECONDARY DATA
The secondary data is information which already exists. The secondary data was
collected from journals, magazines, books. The research specific information was less
available more emphasis was given on primary data.
SAMPLING UNIT
One of the unit in to which an aggregate is divided or regulated as divided for the
purpose of sampling.
SAMPLE SIZE
The Sample of 50 respondents was selected using simple random sampling method.

TOOLS TO BE USED:

The various tools and techniques used to carry out the research are:

 Equity-carve out
 Bankruptcy and
 Buyout
 Ratio analysis
 Relative strength Index
 Exponential moving average
 Rate of change
EQUITY-CARVE OUT

Equity carves-out (ECO or a partial spin-off) is a sort of corporate reorganization, in which a company
creates a new subsidiary and IPOs it later, while retaining control. Usually, up to 20% of subsidiary shares is
offered to the public. The transaction creates two separate legal entities—parent company and Daughter
Company— with their own boards, management teams, financials, and CEOs. Equity carve-outs increase the
access to capital markets, enabling carved-out subsidiary strong growth opportunities, while avoiding the
negative signaling associated with a seasoned offering (SEO) of the parent equity.

BANKRUPTCY

A legal proceeding involving a person or business that is unable to repay outstanding debts. The
bankruptcy process begins with a petition filed by the debtor (most common) or on behalf of creditors (less
common). All of the debtor's assets are measured and evaluated, whereupon the assets are used to repay a
portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of
the debt obligations incurred prior to filing for bankruptcy.

BUYOUT

The purchase of a company's shares in which the acquiring party gains controlling interest of the targeted firm.
Incorporating a buyout strategy is a common technique used to gain access to new markets and is one of the
most common methods for inorganically growing a business.

RATIO ANALYSIS:

The ratios analysis is the most powerful tool of financial statement analysis. Ratios simply
mean one number expressed in terms of another. A ratio is a statistical yardstick by means of
which relationship between two or various figures can be compared or measured. Ratios can
be found out by dividing one number by another number. Ratios show how one number is
related to another.

EXPONENTIAL MOVING AVERAGE

In technical analysis the moving average is one of the key trend lines that are plotted on a
chart reflecting the closing prices over weeks. When the moving average moves above or
below the daily chart it may generate a buy or sell signal.

A moving average is an indicator that shows the average value a security‘s price over a
period of time. When calculating a moving average, a mathematical analysis of the security‘s
average value over a predetermined time period is made. As the securities price changes, its
average price moves up or down.

We can interpret a moving average by comparing the relationship between the moving
averages of the security‘s price with the security‘s price itself.

Buy signal : When the security‘s price rises above its moving average.

Sell signal : When the security‘s price falls below its moving average.

RATE OF CHANGE

The Price Rate of Change indicator (ROC) is an effective momentum oscillator for measuring
price changes between the current price and the price n periods ago. If a price is higher today
than it was n periods ago, it shows that prices are rising in this particular issue, and vice
versa.

RELATIVE STERNGTH INDEX (RSI)

There are a few different tools that can be used to interpret the strength of a stock. One of
these is the Relative strength index (RSI), which is a comparison between the days that a
stock finishes up and the days it finishes down. This indicator is a big tool in momentum
trading.

Calculation:
RSI = 100 – [100/ (1+RS)]
Where,
RSI = (Avg. of n-days up close) / (Avg. of n-days down close)
N = Days (most analysts use 9-15 days)
The RSI ranges from 0 to 100. At around the 70 level, a stock is considered overbought
and you should consider selling. But this number is not written in stone: in a bull market
some believe that 80 is a better level to indicate an overbought stock since stocks often
trade at higher valuations during bull markets. Likewise, if the RSI approaches 30, a stock
is considered oversold and you should consider buying. Again, make the adjustment to 20
in a bear market.