Definition, Meaning & Synonyms

recapitalization

noun

/ˌriːˌkæpɪtəlaɪˈzeɪʃən/

Definition

The process of restructuring a company’s debt and equity mixture to stabilize its capital structure.

Examples

The company underwent a recapitalization to reduce its reliance on debt financing.
After the recapitalization, shareholders saw a significant increase in their equity value.
Successful recapitalization can be a crucial step in recovering from financial distress.

Meaning

Recapitalization helps companies adjust their capital structure, which can include swapping debt for equity or vice versa, to improve financial stability or reduce financial risk.