Methods of business restructuring

Financial restructuring focuses on adjusting the structure of capital, liabilities, assets, and cash flow to reduce financial pressure, improve solvency, and enhance capital efficiency.

Businesses can choose solutions that suit their financial situation and implementation capabilities:

• Debt restructuring: Adjusting the term, payment schedule, or terms of a debt is permitted through agreement with the creditor and in accordance with the law.
• Increase or decrease capital: Adjusting charter capital, supplementing capital sources, or implementing other forms of capital mobilization appropriate to the type of business.
• Asset restructuring: Liquidate, transfer, or reorganize unnecessary assets to focus resources on core operations.
• Optimize cash flow and costs: Review accounts receivable, inventory, operating expenses, and cash flows to improve cash generation capabilities.
• Adjusting the ownership structure: Attracting new investors or changing ownership ratios in accordance with legal regulations.

Organizational restructuring focuses on the management structure, personnel structure, and functional allocation within the enterprise to improve management efficiency and reduce unnecessary hierarchical levels.

Depending on its size and operating model, a business can implement the following solutions:

• Organizational structure adjustments: Redefine the functions, powers, and responsibilities between departments.
• Streamline the organizational structure: Eliminate overlapping positions or management levels, improving the efficiency of human resource utilization.
• Reorganize the operations of the subordinate unit: Reorganize, merge, or terminate the operations of departments, branches, and units that are no longer relevant.
• Improve governance mechanisms: Adjusting decision-making processes, internal controls, and management delegation.

Business restructuring aims to adjust how businesses generate revenue, deliver products, serve customers, and operate their supply chain to improve business efficiency.

Businesses can focus on content that directly impacts business performance:

• Adjust the product and service catalog: Focus on products and services that are profitable and suitable for the market.
• Change the business model: Adjust sales channels, target markets, or methods of delivering products and services.
• Optimizing operational processes: Shorten non-value-adding processes and increase productivity.
• Cost reduction: Eliminate unnecessary expenses while ensuring core operations remain operational.
• Reallocation of resources: Redirect capital, personnel, and assets to more efficient activities.

Businesses can restructure their asset portfolios to free up resources, reduce inefficient assets, and focus on higher-value activities.

Depending on its financial situation and restructuring goals, a business may:

• Liquidate or transfer assets that are no longer suitable.
• Recover outstanding receivables and dispose of non-performing assets.
• Adjust the investment portfolio and capital allocation levels.
• Focus resources on core assets and business operations.

In cases requiring significant changes to the legal model or ownership structure, businesses may consider reorganization as stipulated in the Enterprise Law.

Depending on the type and objectives of the transaction, businesses can perform the following:

• Dividing the business
• Separating businesses
• Business merger
• Business mergers
• Change of business type

The restructuring of enterprises must meet the conditions, procedures, and obligations towards employees, creditors, and related parties according to current law. The current Enterprise Law includes Law 59/2020/QH14 and its amendments, including Law 76/2025/QH15, which takes effect from July 1, 2025.

There is no single restructuring method that suits every business. The choice should be based on the objectives, reasons for restructuring, financial condition, ownership structure, business operations, and existing legal obligations.

Businesses can combine various methods, such as debt restructuring while streamlining operations, adjusting business activities, and reallocating assets. In cases involving capital increases or decreases, capital transfers, securities issuance, or business reorganization, relevant industry regulations should be reviewed.