Compared with previous waves of restructuring, this one was more about generating operating efficiencies by cutting jobs and capacity than about restructuring balance-sheets.There's still a lot more juice to be squeezed from the lemon, says Hal Sirkin of Boston Consulting Group.
Lenders may still need to raise more capital as they restructure balance sheets, the bank added.
This ia particularly likely to be the case when nominal GDP growth approaches the zero bound, given the need for nominal GDP growth to help restructure balance sheets, creating the ingredients to help drive recovery.
He is also reluctant to predict what may lie ahead for GM (shorn of brands and debt, but owned by the government), Chrysler (under the management of Italy's Fiat) and Ford (well-managed, valiantly avoiding the stigma of bankruptcy and bail-out, but still groaning under the weight of an only partially restructured balance sheet).
Banks also are restructuring their balance sheets to squeeze out extra capital.
"This is not just about restructuring our balance sheet," Robert Milton, Air Canada's chief executive, said today in announcing the application for protection under the Companies' Creditors Arrangement Act, roughly equivalent to a Chapter 11 filing in the United States.
Rohith Chandra-Rajan, analyst at Barclays Capital, said: "RBS is well on the way to achieving many of its targets and has done much of the hard work on restructuring its balance sheet and refocusing its business, a stark contrast with Lloyds, which is currently in the midst of a strategic review".
Dobell, who has held Invensys shares for ten years, said that the Schneider deal indicated a renewed appetite for mergers and acquisitions after a long period in which companies have focussed on paying off debts, restructuring their balance sheets and improving cashflow.
The company is closing 120 stores but the bankruptcy filing allows the company to continue operating the remaining shops and pay staff, as well as to honor gift cards and store credits while restructuring its balance sheet, subject to court approval.
Is there a way of restructuring the balance sheet?
