Question

(please type the answers)(business turnaround management 5640)

Research a company that has successfully or unsuccessfully underwent a turnaround strategy and address the following: What causes forced the company to restructure? What restructuring options did the company consider? Briefly describe the restructuring plan and its outcome – be sure to address whether value was created and how (if the business failed please comment on the impact to shareholders) As a stakeholder how do you feel about the company’s restructuring plan and why

Answer 1

I will be looking at a susessfull turaround stategy of an Indian Low cost Airlines Say ABC Ltd. ABC Airlines was second largest airlines back in 2009 & was posting profits due to its correct pricing model however in 2010 its founder sold nearly all its shares to a deep pocket investor (who was inexperianced in aviation business ) due to inexeperiance this investor now owner of airlines taken some bad strategic decisions (eg Choosen to induct some diffrent type aircrafts causing more maintenance cost than a single fleet of aircraft)hence cost of operation rose very steeply causing airlines to loose profilts rapidly .Airline sfortune hit a bottom in December 2014 when lessors took away some aircraft, the carrier missed salary payments and canceled more than 2,000 flights that month. ATF companies added to the airline’s troubles by refusing to fuel the jets unless dues were cleared.

with an initial investment of 5 billion rupees in February 2015 Founder again decided to purchase the controling stake & started to cut costs, renegotiated contracts with vendors and piggy-backed on a surge in domestic aviation traffic to help turn around the fledging airline.The government then permitted the carrier to accept forward bookings, which brought money into the airline’s accounts and giving it a new lease of life. in a span of two years airlines was again strong in Indian skies.

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