ICS , Graduate School of International Corporate Strategy
[Term 2] Corporate Restructuring (R. Yasuda) (2008/Term 1&2 (Fall&Winter))
The objective of this course is to enable students to grasp the essence of success and failure in corporate restructuring, master the basic skills required for corporate restructuring, familiarize them with the key players and their activities including private equity firms and turnaround managers, and apply what they learn to real case examples.
Although the crisis created by NPLs (non-performing loans) seems to have peaked, there are still many corporations that need urgent turnaround. Furthermore, in order to respond to the recent economic recovery, survival alone is not enough for true corporate restructuring. Value creation after restructuring becomes more and more important. Corporate restructuring should change the old corporate culture and establish the business platform for future growth.
On the other hand, private equity funds have become increasingly active in investing in troubled companies and capturing value created through a series of corporate restructuring measures. As such, corporate restructuring is now one of the key issues of corporate executives and investors.
Course Structure
This course will be offered each Wednesday throughout the spring semester. The course will examine key issues of corporate restructuring in the current economy.
First we will cover the five steps of turnaround management:
(1) Quick diagnosis and assessment of the crisis
(2) Short-term cash flow generation and balance sheet restructuring
(3) Business portfolio restructuring
(4) Recovery from bankruptcy
(5) Rehabilitation for future growth
For each step, the basic concept and required financial and operational skills will be discussed.
Then we will review how private equity funds (PEFs) identify turnaround opportunities and enhance value through various types of restructuring of the acquired company. We will cover how PEFs assess the hidden value of troubled companies, how they structure financial schemes, how they enhance corporate value, and how they exit successfully.
Teaching Method
The course will comprise three elements: (1) lectures on basic concepts and methodology, (2) class discussions with students, and (3) application of theory to two types of cases. For each theme, a lecture will be given first, followed by analysis of the first case, which will give students an opportunity to apply basic methodology to the case. Many of these analyses will be conducted in the form of homework assignments. The second case, which focuses on an actual company’s case, will be used in the class discussion. This will give the students a chance to get a more comprehensive picture of turnaround management, including interactions with banks, human and organizational issues, as well as financial and strategic issues.
The pattern of “lecture/application of methodology to cases/discussion of actual cases” will be repeated in each theme. Guest speakers will also be invited to share their turnaround experiences.
Finally, students are encouraged to choose a real case at the beginning of the course and apply what they have learned to design their own restructuring plans in groups.