What does 'asset divestiture' mean in the context of restructuring?

In the context of restructuring, 'asset divestiture' refers specifically to the process of selling off underperforming assets. This strategy is typically employed by companies to improve their overall financial health and operational efficiency. By divesting assets that do not contribute positively to the company’s performance or strategy, organizations can reallocate resources to more profitable areas, reduce debt, and enhance cash flow. This approach is particularly pertinent during restructuring phases, as companies strive to strengthen their balance sheets and focus on core operations.

The other options represent different strategies that do not align with the definition of asset divestiture. Acquiring new profitable units implies growth and investment rather than selling off assets. While increasing market share can be a goal of restructuring, it does not directly involve divesting underperforming assets. Similarly, converting debt into equity is a financial restructuring strategy aimed at addressing capital structure rather than divesting assets.