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Recapitalization




Recapitalization is a type of corporate restructuring that aims to change a company's capital structure. Usually, companies perform recapitalization to make their capital structure more stable or optimal. Recapitalization essentially involves exchanging one type of financing for another – debt for equity or equity for debt.

There are several reasons for which a company would choose to recapitalize: a decline in its stock prices, to reduce debts, to prevent a takeover, during bankruptcy and so on.