3) what is the difference between financial restructuring and corporate structuring.

According to, (Finch, 2003) financial restructuring is the process of reorganizing or

reshuffling of company’s financial structure which is comprised of but not limited to equity
capital and debt capital. Financial restructuring can be done because of either compulsion or
as part of the financial strategy of the company. However, corporate restructuring is a
corporate act taken to meaningfully modify the structure or the operations of the company.
This usually happens when the company is facing significant difficulties and is in fiscal or
operational jeopardy. Usually, the restructuring is done for the purposes of reducing the
company into a smaller and more manageable entity. Corporate restructuring is crucial in
eliminating all the financial plights and improve the performance of the corporation.

Corporate restructuring can be done at numerous levels including the economy level, the
industry level and firm level depending on the company size and the scope of the introduced
changes (Depamphilis 2019). Furthermore, it can involve legal restructure, financial
restructuring cost restructuring, repositionable and other forms. Merges and acquisition may
be recognized as one of the most popular tools of corporate restructuring since they allow
established corporations to instantly procure new competences and capabilities through
merging with other corporations or acquiring a smaller innovative business unit. However,
the financial restructuring happens in the two forms that is in court financial restructuring and
out of court restructuring. For an organization with limited number of creditors out of court
restructuring is the most preferable one. Debtors ordinarily prefer out of court restructuring,
which attempts to come to an agreement with the creditors without having to go court.

According to Slazar and Alberto corporate restructuring is characterized by high failure rates
due to the metamorphoses in the company cultures thwarting the realization of planned
strategic synergies. The companies succeeding in merges and acquisitions usually choose
compatible targets or maintain the structural integrity of the acquired companies making them
serve as semi independent research and development departments rather than the deeply
integrated subordinate units. However the rate of success when it comes to financial
restructuring is usually higher since the process is an internal undertaking with less external
interreference as compared to corporate structuring.

Lastly the reason for corporate restructuring usually involves the need to optimize corporate
portfolios in order to minimize costs and increase internal coherence (Mosyoki and
wamuyu2017) on the other hand the reason of the financial restructuring is to avoid
liquidation, which is when the company permanently goes out business. liquidation lead to
significantly lower recoveries to creditors and all other related stakeholders.