Restructuring

Restructuring encompasses the operational, financial and organisational measures designed to transform a distressed or underperforming company — cost reduction, asset disposals, debt renegotiation, recapitalisation and management changes. It may be implemented through voluntary (amiable) arrangements or formal insolvency procedures. In M&A, restructuring may precede a sale process to improve attractiveness. In valuation, the post-restructuring value is compared to liquidation value to demonstrate viability. Restructuring charges are non-recurring items excluded from normalised EBITDA in due diligence.

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Example: a Swiss industrial SME in difficulty launches an 18-month restructuring programme: disposal of a loss-making subsidiary (-CHF 800,000 negative EBITDA), 15% workforce reduction (-CHF 600,000 payroll), renegotiation of CHF 5.0 million of bank debt (18-month moratorium). These measures restore positive EBITDA of CHF 1.4 million, sufficient debt service capacity and a viable going-concern business — justifying continuation rather than liquidation.

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Hectelion supports restructuring processes from financial diagnosis through creditor negotiation and valuation of recovery scenarios.