Corporate Financial Restructuring

Syllabus

SE FIN - 15: Corporate Financial Restructuring

Unit 1: Basic Concepts: Basic Concepts: Meaning of Corporate Restructuring, Need, Scope, Concept of Internal & External Restructuring, Different Forms and Motives, Applications of Corporate Restructuring, Financial Perspective in Restructuring, Reorganization Strategies in Corporate Organizations.                                                                                       (5+2)

Unit 2: Overview of Corporate Finance and Corporate Restructuring: Financial Restructuring & Divestiture, Funding Options for M&A. Strategic Alliances & Joint Ventures, Employee Stock Ownership, Going Private & Leveraged Buyouts. Creating Value Through Corporate Restructuring-Corporate Reorganization Strategies-Spin-Offs, Equity Carve-Outs, Target Stock and Divestures, Financial Distress & Bankruptcy, Liquidation, Net Operating Losses, Sources of Funding & Problem of Changing Capital Structure, Strategic and Financial Sponsors, Pros and Cons of Different Sponsors, Capital Cash Flows Vs. Equity Cash Flows.             (8+2)

Unit 3: Dimensions of Mergers & Acquisitions: Mergers & Acquisitions Concept, Types, Reasons and Process, Accounting for Mergers & Demergers, Regulatory Framework of Mergers and Acquisitions. Due Diligence for M & A, Cross-Border Mergers & Acquisitions. Take-Over and Defence Tactics Structural Defences Vs. Non-Structural Defences, Contribution Analysis, Duties of Board of Directors, Market for Corporate Control. Forms of Compensation. Anti-Takeover Strategies, Leveraged Buyouts, Portfolio Restructuring.           (7+2)

Unit 4: Valuation Aspects of Corporate Restructuring: Methods of Payment for M & A and Calculations of Exchange Ratio, Fundamentals and Methods of Business Valuation, Calculations of Financial Synergy and Return, Different Approaches of Valuation – Comparable Company & Transaction Analysis Method, DCF, Real Option Method, Equity/Residual Cash Flows, Adjusted Present Value, Capital / Leveraged Cash Flows, Relative Valuation Analysis, Sensitivity Analysis, Tables, Developing Break Up Analysis.     (7+2)

Unit 5: Corporate Governance Aspects of Restructuring: Domestic & International Trends Relating to Governance Practices Pertaining to Corporate Restructuring, Reference of Corporate Governance in Indian Companies Act (Amended) 2013, SEBI Regulations, Listing Agreement etc. Shareholder Democracy in Restructuring Process, Role of Investors Creditors, Role of Non-Executive Directors in Restructuring Process, Disclosures and Clarifications on the Part of Board of Directors and Inclusion in the Auditors’ Report. (8+2)

*Note:

1)       To facilitate understanding of corporate merger and acquisition activity, restructurings and corporate governance relevant Cases should be incorporated in teaching pedagogy.

2)       Numerical Problem will be asked on the following:

i)         Calculations of exchange ratio,

ii)       Calculations of financial synergy and return,

iii)      Different approaches of valuation – Comparable

iv)     Company & transaction analysis method, Discounted Cash Flow (DCF),

v)       Real Option method,

vi)     Formula approach for valuation and other important methods of valuation.