Question

Many publicly traded financially distressed companies are purchased by private equity funds and delisted from the stock exchange. Several years later they are brought back to the exchange for a new share listing. Why do you think private equity firms delist financially distressed firms? Why do they bring them back to market?

Answer 1

Many publicly traded financially distressed companies are purchased by private equity funds and delisted from the stock exchange.Several years later they are brought back to the exchange for a new share listing. I think private equity firms delist financially distressed firms Because Due to the their bad financial performance investors are not take interest in investing in these types of companies and also in case of Listed companies There are also various laws requirements to follow and also there is not a 100% holding by anyone so many issues are also come while taking decisions so In this case private equity funds are purchased thse types of companies and after his full holding they run company with his full capability and when the company gives better results Shows better financial performance They need money to increase the scope of the work of the company and therefore to generate funds from the public they list the company back to the stock exchanges Now due to its Better financial condition or performance they get funds from the investors because now they attract towards this type or growing companies and invest the money. The crux of it is that to make a proper holding for improving the financial performance of the companies these companies which are financially distressed are purchased by the private equity funds