Capital restructuring of corporate entities is the systematically planned and packaged re-positioning exercise deliberately embarked upon by entrepreneurs with the aim of recognizing the ownership equity of the firm and repositioning the firm in proper footing as to effect survival and withstand increased profitability.

The main objective of this study is to determine the problems that leads to frequent corporate failure as well as the prospect of Nigeria as a base. For this research work three firms in Nigeria were visited.

In effecting this research work, the researcher used questionnaire administered to both prospective investor, existing owner of these three firms and a sample of customers drawn from Enugu-Onitsha, Aba and Nnewi depots of these firms. The researcher also used oral interviews with the key management staff of these three firm, as well as related published and unpublished data. The researcher analysed the data and information obtained and also tested the hypothesis using chi-square and correlation analysis.

Though critical analysis, it was observed that some of the problem militating against production firms that leads to their failure in Nigeria could have been averted through capital restructuring and proper financial portfolio. However, some customers undertaking proper feasibility studies. Monetary authorities and National Economic Reconstruction Fund (NERFUND) could give lighter conditionalities for and, fund assistance as well as eligibility for firms enlistment into the stock market (going public) this would enable entrepreneurs evolve effective growth policies, consolidation programmes as well as fund mobilization, strategies that would be possible for their management to implement.

In view of the finding and outcome of the tested hypothesis it was concluded that the investors dissatisfaction with the present enterprises approach to survival and profiteering as well as the various constraint on production companies ability to survive in a harsh economic environment would be minimized firm in the Eastern states has brighter prospects if they could recongnize their capital structure and base and be positioned for greater profitability and growth. This is because most of the problem are amended solution.

 

Title page ii

Approval page iii

Dedication iv

Acknowledgement v

Abstract vi

Table of Content viii

1.1 Background of Study 1

1.2 Statement of the Problem 4

1.3 Objective of Study 6

1.4 Significance of Study 7

1.5 Research Question 8

1.6 Research Hypothesis 9

1.7 Scope and Limitation of the Study 10

1.8 Plan for the Development of Study 11

1.9 Definition of Operational Terms 12

2.0 Review of Related Literature 17

2.1 What is finance, capital structure & Capital Restructuring 18

2.2 Debt and Equity Mix (Gearing) 19

2.3 Cost of Capital 21

2.4 Optimum Capital 22

2.5 Capital management in a Contemporary Business 23

2.6 Causes of Corporate Failure in Nigeria 27

2.7 External (Environmental) Factors 31

2.8 Internal Factor 35

2.9 Effects of Corporate Failure in Nigeria 37

2.10 Signs of Corporate Failure 40

2.11 Steps to take to avoid Corporate Failure 41

3.0 Research Design and Methodology 46

3.1 Research Design 46

3.2 Sources of Data 46

3.3 Primary Sources of Data 47

3.4 Secondary Sources of Data 48

3.5 Area/Unit of Study 49

3.5.1 The Universe 49

3.5.2 The Target Population 49

3.6 Method of Investigation 50

3.7 Oral Interview Method 50

3.8 Questionnaire Method and Its Design 51

3.9 Sampling Population and Sample Size 53

3.10 Determination of Sample Size 54

3.11 Method of Data Presentation 56

3.12 Method of Data Analysis 56

4.0 Data Presentation Analysis 60

4.1 Data Presentation 60

4.2 Data Analysis 70

5.1 Findings 81

5.2 Recommendations 83

5.3 Conclusions 86