“Leaning-out” of Group – Consolidation and Simplification of Group Structure: A Pertinent Consideration in Post Covid 19 Era

Almost all corporate houses have a number of legal entities under their umbrella for various purposes. However, over a period of time, some of these entities become redundant or burdensome but continue to consume resources and turn into cost centers without justifiable returns. Changing regulatory environment, onerous legal obligations on promoters/directors and increasing compliance costs prompt managements to consider simplifying the group structure by reducing the number of entities.

This thought of Group consolidation and simplification has further aggravated due to COVD-19, which has reduced cash-flows and increased financial stress. Simple and Lean Group structure is now becoming talk of the town. But implementing consolidation and simplification has many challenges in terms of cost, compliances, regulatory complications and long term implications.

Against this backdrop, Corporate Professionals hosted a Webinar on 30.05.2020 to discuss and deliberate upon the challenges involved in process of Leaning-Out.

This presentation covers the critical aspects, such as why corporate houses create so many entities, why is it important to consolidate and simplify the Group structure in present scenario. It also deliberates how to approach the leaning out process, including various legal, procedural and technical aspects of leaning out (group consolidation) process.