Understanding corporate finance: raising finance: reorganising debt
When companies are bought and sold and groups restructure, the existing debt is often reorganised as part of the process.
Where shares in a company change hands the new owner may want any existing debt to be transferred from the old group into its ownership. The debt transferred may be an asset or liability of the target company. See CFM11170.
Where a company finds that it has too much debt it might want to restructure itself, replacing debt with equity or perhaps renegotiating its debt so that the terms are more suitable. See CFM11180.
Where a company is the subject of a management buy-out the ‘managers’ will need to raise finance to buy the company and possibly to repay its existing borrowings. See CFM11190.