Financial Restructuring is a form of corporate restructuring.

Potential reasons for financial restructuring are:

  1. Financial difficulty
    • Unable to pay debts
    • Breaches of covenants
    • Accumulated losses
    • Overvalued or fictitious assets
    • Negligible net worth
  2. External competition
  3. Obsolete technology
  4. Misappropriation of funds
  5. Loss of market share
  6. Inefficient management (financial, human, technical etc)
  7. External factors (market trends, population trends, availability of resources etc)
  8. Availability of alternate investors
  9. Strict lending criteria of banks


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