Business buyback is the procedure for changing the owner of an organization by selling its assets. The property is transferred to the new owner as part of the company's reorganization, bankruptcy prevention or additional profit. For the economy, buybacks are a tool to keep stock markets active and prevent corporate capital dilution.
Objectives
The buyout of enterprises is initiated to solve various problems:
increasing the profitability of the company and the value of its shares;
changes in the capital structure;
business expansion.
The buyout of the company demonstrates to the market players the investor's trust in the company's management and its potential as an asset for investment.
Kinds
The owner of an asset changes in the following ways:
Redemption by personnel. A popular way to prevent bankruptcy is when a controlling stake in a company is acquired by its employees who want to keep their jobs.
Privatization. The procedure for changing the management of an organization as a result of the repurchase of shares from the previous holders.
Redemption of the enterprise. Concentration of shares in the hands of the issuer. Buybacks are popular in developed countries with high capital gains taxes, where they are practiced as a way to reduce taxes on dividends.
When initiating a buyout of an enterprise, the priority right to acquire assets is given to the organization's labor collective. If the staff refuses to buy shares, the company is put up for auction.
More here - https://en.wikipedia.org/wiki/Repurchase_agreement
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