Financial restructuring is a process by which a company in the UK reorganises its finances in order to improve its overall financial performance and position.
This can involve a variety of changes, such as reducing debt, strengthening the balance sheet, raising capital, facilitating a corporate restructure (see our Business Review) and/or renegotiating with creditors.
One common form of financial restructuring in the UK is a “debt restructuring”, in which a company that is facing financial difficulties takes steps to reduce its debt and improve its balance sheet. This can involve negotiating with creditors to restructure the terms of existing debt, such as extending the repayment period or reducing the interest rate. In more severe cases, a company may also seek protection from its creditors through a formal insolvency process such as a Company Voluntary Arrangement (CVA) or Administration.
Another form of financial restructuring is “equity restructuring”, in which a company raises new capital by issuing new shares or selling ownership stakes to new investors. This can help a company to strengthen its balance sheet and improve its financial position, as well as to raise money for growth and expansion.
A company may also seek a financial restructuring due to a change in the economic or industry conditions which may adversely affect the company’s ability to service its debts, and need to realign its financial structure to be able to adapt to the new conditions.
Financial restructuring advice
If you are the director of a UK-based company facing financial difficulties, or you are struggling with high levels of debt and a weak balance sheet, our financial restructuring service can help you tackle these problems and work towards a stronger financial position.