Dividend Recapitalization

外汇网2021-06-19 16:35:23 67

When a company incurs a new debt in order to pay a special pidend to private investors or shareholders. This usually involves a company owned by a private investment firm, which can authorize a pidend recapitalization as an alternative to selling its equity stake in the company.

Also known as a "pidend recap".

Taobiz explains Dividend Recapitalization

The pidend recap has seen explosive growth, primarily as an avenue for private investment firms to recoup some or all of the money they used to purchase their stake in a business. It is generally not looked upon favorably by creditors or common shareholders because it reduces the credit quality of the company while only benefiting a select few.

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