What is the primary goal of restructuring?

The primary goal of restructuring is to restore the viability of the business. This process typically involves reorganizing the company's operations, finances, and management structures to address underlying issues that are causing financial distress. By focusing on revitalizing the business, the aim is to improve performance, enhance operational efficiencies, and ultimately create a sustainable path for future growth and profitability.

Restructuring often includes negotiating with creditors, making operational changes, or even shifting business strategies, all with the intent of allowing the company to function effectively again. When a business successfully restructures, it is often in a better position to meet its obligations, adapt to market conditions, and serve its stakeholders effectively.

While increasing shareholder value may be a desirable outcome of successful restructuring, it is not the primary goal. Instead, it is a potential consequence of restoring the business's viability. Liquidating assets may be part of the process in certain situations but is generally a last resort rather than a primary objective. Similarly, paying off all creditors immediately is often unrealistic in a restructuring scenario, where the focus is on finding a manageable way to address debts over time rather than immediate payment.