What is the difference between refinancing and restructuring?

What is the difference between refinancing and restructuring?

Debt restructuring is used when a borrower is under such financial distress that it prevents timely repayment on a loan. Debt refinancing is used on a much broader basis than restructuring, in which a borrower leverages a newly obtained loan with better terms to pay off a previous loan.3

What happens in corporate debt restructuring?

The debt restructuring process typically involves getting lenders to agree to reduce the interest rates on loans, extend the dates when the company’s liabilities are due to be paid, or both. These steps improve the company’s chances of paying back its obligations and staying in business.

What is personal loan restructuring?

What is loan restructuring? Loan restructuring is the process by which ICICI Bank will provide relief to borrowers whose financial situation has been adversely impacted by the COVID-19 pandemic and they are unable to pay their due EMIs in a timely manner.17

Is restructuring of loans good for banks?

Mumbai: The loan restructuring facility the Reserve Bank of India (RBI) has allowed will leave no impact on the credit score of retail borrowers. The regulator allowed banks to offer a repayment moratorium, for up to two years, as a part of the restructuring exercise.15

Who is eligible for loan restructuring?

Here are the basic eligibility criteria for loan restructuring: The applicant must have not been more than 30 days overdue on EMI/Interest payment as on Mar 01, 2020. This period is 89 days for MSME loan borrowers with borrowing from banks and NBFCs below Rs. 25 crores.

How can I get loan restructuring from SBI?

If you intend to apply for restructuring of your outstanding SBI personal loan, you have to do so directly through the SBI website or visit your home branch to apply in person. Now that the COVID-19 moratorium on SBI personal loans has ended, borrowers are required to start making regular EMI payments.17

What restructuring means?

Restructuring is when a company makes significant changes to its financial or operational structure, typically while under financial duress. Companies may also restructure when preparing for a sale, buyout, merger, change in overall goals, or transfer of ownership.

What are the types of restructuring?

Types of Organizational Restructuring

• Mergers and Acquisitions. This restructuring takes place in case of a merger or acquisition.
• Legal Restructuring. A restructuring as such takes place when the changes in a company pertain to legal norms.
• Financials.
• Repositioning.
• Cost-Reduction.
• Turnaround.
• Divestment.
• Spin-Off.

What are the problems with restructuring?

When the news gets out that the company is restructuring, some employees may begin looking for new employment. The stress of the restructuring sometimes takes away from the staff’s focus on their actual work. Employees become even more worried if the company isn’t forthcoming with details about the restructure.

How do you restructure a department?

How to restructure a company or department

1. Start with your business strategy.
2. Identify strengths and weaknesses in the current organizational structure.
3. Consider your options and design a new structure.
4. Communicate the reorganization.
5. Launch your company restructure and adjust as necessary.

What are the restructuring strategies?

Regardless of the reason for restructuring, most restructuring strategies share some of the following features:

• Improvement in the company’s balance sheet.
• Reduction of tax liability.
• Divestment of underproductive assets.
• Outsourcing of some functions.
• Relocation of operations.

How do you communicate with reorganization?

Change Communications: How to Announce a Team Restructure

1. Be prepared.
2. Communicate early and often.
3. Encourage open, transparent discussion.
4. Handle any potential layoffs quickly and with dignity.
5. Don’t forget customers and other stakeholders.

How can a company restructure effectively?

Use the following strategies to guide you as you carefully plan your business restructure.

1. Avoid waiting too long.
2. Conduct an honest assessment.
3. Review your strategy and business model.
4. Look for ways to achieve quick results.
5. Aim to reduce complexity.
6. Determine your core activities and processes.

What are the three types of restructuring strategies firms use?

The three types of restructuring strategies: downsizing, downscoping, and leveraged buyouts.

How would restructure enable a company to achieve competitive advantage?

Restructuring gives companies the ability to concentrate on the productive areas and this ensures that the products or services it provides are of quality and meet customer expectations which enable them create a competitive advantage.

What would be the result if you successfully reorganize or restructure your business?

Reorganization, or business restructuring, is a process where a company does an overhaul of its current strategy, setup, and operations. A successful company restructure can result in increased profits, operational efficiency, and debt paydown.30

What are the reasons for corporate restructuring?

Companies restructure for a variety of reasons:

• To reduce costs.
• To concentrate on key products or accounts.
• To incorporate new technology.
• To make better use of talent.
• To improve competitive advantage.
• To spin off a subsidiary company.
• To merge with another company.
• To decrease or consolidate debt.