Corporate financial restructuring is any significant alterations in an organisation’s financial structure, or ownership or control, or business portfolio, planned to scale up the value of the establishment. There are various reasons (financial & non-financial) that may trigger the need for financial restructuring. Case in point: Insolvency. Conversion of debt into equity (aka ‘swap) between the company and the lenders, under which the debt components of the company are converted into equity of the business, is a type of financial restructuring arrangement.

Change seems scary only until you come across the advantages! Organisations are equipped to tackle the teething problems, but when big hurdles start blocking their way it’s time to think of restructuring, be it organisational or operational. For instance, debt restructuring. When companies face challenges in making the payments on their debt, they will often consolidate and adjust the terms of the debt in a debt restructuring, creating a way to pay off bondholders. A company can also reorganise its operations or structure using various cost-cutting tools and methods, such as payroll, or slashing its size through the sale of assets. Restructuring in a company occurs when it makes momentous changes to its financial or operational structure, typically to deal with financial intimidation.

The only way for businesses to fit in the market changes and faltered performance is restructuring. By streamlining processes, integrating systems and adding new capabilities, a company can transform to navigate industry or economic crises. Companies may also consider restructuring when readying for a sale, buyout, merger, change in overall goals, or transfer of ownership. In a nutshell, when a company sees a scope of making its business operations smoother and more economically sound, it turns to business restructuring experts.

When it’s time to change, smart business persons do not shy away from taking appropriate measures for the necessary transformation to be on the safe side. And the first and foremost is hiring a business restructuring advisor from one of the best business/management advisory consultancies in Dubai, UAE. We, at Adam Global, perform an audit in order to determine the advantages and disadvantages of restructuring and examine all the factors that are required to be addressed. So, you can amplify the efficiency of your business. Crumbling financial fundamentals, miserable earnings performance, dull revenue from sales, overweening debt, and too much competition to beat in the industry are some of the dead giveaways that your business operations need restructuring, maybe to grow or just to sustain. Let’s take a look at a few more reasons that can alarm a business to take a restructuring call.

• Stagnant or shrinking revenues
• Profits come to a screeching halt
• High turnover
• Excessive debt/loans & insolvency
• Low morale or spirit
• Traditional systems
• Overburdened or dissatisfied employees
• Under-utilized human resources
• Inadequate communication
• Lack of management
• Market is emerging
• Tax laws
• Shift in prices
• Labour issues
• Deteriorating or fluctuating market demand

Now that we already know about the various reasons that fuel the need for business restructuring. Despite so many risks associated with it, any sort of restructuring brings with it myriad benefits to revel in, both tangible and intangible. While some benefits are financial, such as reviving a worsening business, elevating a company’s value, and preparing it for sale or transfer to the next generation.

Business is synonymous with risk. Entrepreneurs in Dubai and beyond must be prepared to confront the fears and risks that enter the organisation along with the benefits of corporate restructuring. For example, if a business downsizes during restructuring, the loss of highly skilled workers may result in a loss of productivity. If a company’s restructuring involves new technology or changes in employee responsibilities, productivity may suffer while employees learn their new roles.