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CORPORATE

RESTRUCTURING

CORPORATE

RESTRUCTURING

Pavan Kumar Vijay

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GOVERNING PROVISION

SECTION 391-394 of Companies Act, 1956

Most liberal sections in the entire

Companies Act, 1956.

By way of SCHEME you can

propose & achieve whatever you want

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TYPES OF RESTRUCTURING

REDUCTION

OF CAPITAL

MERGER

MERGER

DEMERGER

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RESTRUCTURING

BIFRHigh Court

Approving Authorities

Approving Authorities

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MERGER

Combining of two ormore commercial

organizations into one inorder to increaseefficiency and sometimesto avoid competition.

MERGER

REVERSE MERGER

As a commercial term, itmeans when a HealthyCompany (in terms of size,capital or listing status)is

merging in a Weak Company(in terms of size, or

unlisted).

SECTION 391-394 of Com anies Act, 1956

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DEMERGER

Division of a Company with two or moreidentifiable business units into two or more

separate companies

SECTION 2(19AA) of Income Tax Act, 1961.

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Extinguishing or Reducing the paid-upcapital, Securities Premium Account or

liability of members with respect totheir unpaid calls

-AN EFFECTIVE WAY OF INTERNALRESTRUCTURING

REDUCTION OF CAPITAL

SECTION 100 105 of Companies Act, 1956SECTION 100 to 105 of Com anies Act, 1956

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A FEW VARIETY OF MERGER

Unlisted with Listed

Listed with Unlisted

Merger of Subsidiary with Holding Company

Merger with Group Company

Healthy Company with Weak Company

Merger through BIFR

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STOCK EXCHANGES ROLE

REQUIREMENTS

Listing Agreement Compliances

Stock Exchange Internal Norms

Observations

Compliance of Securities laws

Compliance of Companies Act

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Valuations Analysis

No undue benefit to Promoters /

Particular group

Investors interest not to be affected

Back door Entry for listing

Change in Management/Control

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MERGER THROUGH BIFRMERGER THROUGH BIFR

AN EFFECTIVE

WAY

TO

REVIVE

YOUR

SICK COMPANY

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MERGER THROUGH BIFRMERGER THROUGH BIFR

Single window clearance for a legal formalities

under Companies Act;

Relaxation in compliance with Income Tax

related compliances;

Tax breaks and similar other benefits;

Exemption from SEBI Takeover Code

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REDUCTION OF CAPITALREDUCTION OF CAPITAL

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Types of Reduction of CapitalTypes of Reduction of Capital

Writing off Losses & Fictitious Assets

Correction of Over- Capitalization

Distinguishment of the Liability in respect of

unpaid portion of face value.

Distribution of accumulated profits by

Payment to shareholders a part of share

capital.

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Reduction of Capital- A Strategic StepReduction of Capital- A Strategic Step

To Clean-up the Balance Sheet

To rationalize the capital base

Revival of Sick Company

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LISTINGLISTING

Direct listing is costly & complicated

But Listing of Company provides for..Unlocking value of business

Brings liquidity

Attract investors for further growth

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Restructuring offers tremendous opportunitiesfor companies to grow & add value to the

shareholders

It unlocks the true potential of the company

It is a Strategy for Growth & Expansion

It also helps in Cleaning up &create Synergy of Resources

To sum up