recapitalization Definition
the act of changing a company's capital structure, often by exchanging debt for equity or vice versa.
Using recapitalization: Examples
Take a moment to familiarize yourself with how "recapitalization" can be used in various situations through the following examples!
Example
The company underwent a recapitalization to reduce its debt burden.
Example
The recapitalization plan involved issuing new shares to existing shareholders.
Example
The bank's recapitalization was necessary to meet regulatory requirements.
recapitalization Synonyms and Antonyms
Synonyms for recapitalization
Phrases with recapitalization
a financial transaction in which a company takes on significant additional debt to finance a special dividend or share repurchase
Example
The leveraged recapitalization allowed the private equity firm to extract cash from the company while maintaining control.
a financial transaction in which a company issues new equity to reduce its debt burden
Example
The equity recapitalization allowed the company to reduce its interest payments and improve its credit rating.
a financial transaction in which a company exchanges its existing debt for new debt with more favorable terms
Example
The debt recapitalization reduced the company's interest expense and extended the maturity of its debt.
Summary: recapitalization in Brief
Recapitalization [ˌriːkəˌpɪtəlaɪˈzeɪʃən] refers to the process of changing a company's capital structure, often by exchanging debt for equity or vice versa. It is a form of restructuring that can involve issuing new shares, taking on additional debt, or exchanging existing debt for new debt with more favorable terms. Examples include leveraged recapitalization, equity recapitalization, and debt recapitalization.
