What Is Restructuring?
Restructuring is an action taken by a company to significantly modify the financial and operational aspects of the company, usually when the business is facing financial pressures. Restructuring is a type of corporate action taken that involves significantly modifying the debt, operations or structure of a company as a way of limiting financial harm and improving the business.
When a company is having trouble making payments on its debt, it will often consolidate and adjust the terms of the debt in a debt restructuring, creating a way to pay off bondholders. A company restructures its operations or structure by cutting costs, such as payroll, or reducing its size through the sale of assets.