Cutting your losses when restructuring China operations
March 17, 2009 | BY
clpstaff &clp articlesForeign companies are contemplating how to restructure their loss-making or low-profit China operations. There are several good options available, and several unwise choices, too. By Ghislain de Mareuil and Julie Tong, DLA Piper, Shanghai.
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Although restructurings often involve mergers and acquisitions (for example, selling out the struggling business or combining it with another company), this article will not address those specific and wide-ranging options but will concentrate on other issues related to restructuring and closing down, from a strategic level.
When a China-incorporated foreign-invested company is loss-making or insufficiently profitable, several options are available to it, including downsizing or closing down. There are also specifics to consider when the company to be restructured is part of a larger group.