Financial structure of a company comprises of:
- Paid up equity and preference share capital
- Borrowings in the form of
- Long term loans from financial institutions
- Working capital from banks including loans through commercial papers
- Credits from suppliers
- Trade deposits
- Public Deposits
- Deposits and loans from directors, their relatives and business associates
- Deposits from shareholders
- GDRs, ADRs, FCCCBs
- Funds raised through any other local instrument.
Need for financial restructuring
- Necessity for injecting more working capital to meet the market demand for the company’s products or services.
- When the company is unable to meet its current commitments
- When the company is unable to obtain further credit from suppliers of raw materials, consumable stores, brought – out components etc. and from other parties like those doing job work for the company.
- When the company is unable to utilize its full production capacity for lack of liquid funds.