Startup Terms Glossary
What is Recapitalization?
Sometimes, companies need to re-organize their debt in order to stabilize the company’s capital structure. This is most often done through a process called recapitalization, which usually is achieved by replacing one type of security for another. Recapitalization is valuable to business owners who wish to liquidate some of their assets without selling their shares in the company.
Recapitalization Examples
Examples of when recapitalization might be utilized include:
- Example 1. During times of financial instability
- Example 2. To increase the price of shares by lowering debt to equity ration
- Example 3. To achieve higher payouts to stockholders
Here’s another web page about recapitalization.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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