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Define Capital Reconstruction as used in mergers and acquisitions

      

Define Capital Reconstruction as used in mergers and acquisitions

  

Answers


Francis
It is the reorganization of the company’s financial structure either internal or external. If a company has sustained a considerable loss and is unable to satisfy its creditors in full, a reconstruction scheme can be instituted to save the company from receivership or liquidation.

Capital reconstruction may include;
- Increase in the authorized share capital
- Reduction of capital
- Consolidating shares into shares of larger amounts
- Splitting of shares into smaller amounts
- Purchase or redemption of shares
- Absorption
- Amalgamation
francis1897 answered the question on February 27, 2023 at 07:05


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