Mezzanine Capital as A Tool to Increase Enterprise Value in Crisis

Dec, Paweł; Masiukiewicz, Piotr

doi:10.5296/bmh.v5i1.10955

Cited by 3 publications

(2 citation statements)

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“…The above mezzanine financing instruments can be classified from the point of view of the corporate balance or from the point of view of public tradability. From the point of view of the corporate balance, we can differentiate equity mezzanine, including mezzanine financing instruments with a higher rate of equity, and debt mezzanine, including mezzanine financing instruments with a higher debt tendency (Dec & Masiukiewicz, 2017;Golej, 2016;Meluzin & Zinecker, 2009). From the point of view of public tradability, it is possible to distinguish private mezzanine, including mezzanine financing instruments that do not enter the open capital market, i.e.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…Although some mezzanine financing sources were first used in the USA as early as in the 80's of the 20th century and then in Europe in the 90's, they still have not seen broad utilization in a number of countries, see more e.g. in (Amon & Dorfleitner, 2013;Dec & Masiukiewicz, 2017;Knežević, Ljumović, & Pavlović, 2015;Sazanov et al, 2016;Svedik & Tetrevova, 2014b).…”

Section: Introductionmentioning

confidence: 99%

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Mezzanine Financing Instruments in Comparison to the Classic Financing Sources

Tetrevova

Svedik

2018

Business, Management and Education

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The paper deals with innovated financing in the form of mezzanine financing instruments (sources). The authors aimed to identify, characterize, and assess mezzanine financing instruments in comparison to the classic corporate financing sources. Mezzanine financing represents an innovated form of financing interconnecting the features of equity and debt. The paper specifies the sources and characterizes and assesses pros and cons of each of them. Subsequently, it presents an overall evaluation of mezzanine financing instruments in comparison to the selected equity and debt financing sources. This evaluation was performed on the basis of 14 set criteria using a binary scale.

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Section: Literature Review and Hypothesesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Mezzanine Financing Instruments in Comparison to the Classic Financing Sources

Tetrevova

Svedik

2018

Business, Management and Education

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Mezzanine Financing: Application Practices and Leadership Aspects

Cheredov¹,

Tarkhanova²,

Mezentseva³

2019

Proceedings of the 5th International Conference on Social, Economic, and Academic Leadership (ICSEALV 2019)

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Mezzanine financing instruments are quite common throughout the world, the practice of their application began to appear in Russian Federation. The potential of mezzanine lending is due to the current volatile economic situation, when it is difficult to apply traditional financing methods. Our paper presents a comparative study of mezzanine financing in Russia and other countries, from the point of view of determining the level of development of mezzanine lending in Russia and the manifestation of characteristic patterns that lead, ultimately, to their own, different from other countries, direction of the formation of the market of mezzanine products. We discuss the main approaches of Russian and foreign researchers to the concept of "mezzanine financing", determine the possible forms of its application in practical activities, and analyze the existing practice in Russian Federation and other countries and make conclusions and implications. IntroductionMezzanine financing is a hybrid form of debt and equity financing, which is usually used to finance the expansion of companies. Despite the fact that mezzanine financing has become a practice in the United States, to date, mezzanine financing instruments have still not found wide application in a number of countries. At the same time, gradually and in the countries of Eastern Europe, the mezzanine is being transformed from a niche instrument used in a limited number of types of financing, into the main, widely used form of borrowed financing and a supplier of growing capital (Amon and Dorfleitner 2013; or Dec and Masiukiewicz 2017).Considering mezzanine financing as a concept, Leach and Melicher (2014) note the possible goals of financing to expand production, marketing costs, improve products, etc. (Leach and Melicher 2014). The mezzanine financing mechanism is based on the use of classical sources of financing -bank loans, corporate bonds and ordinary shares (Tetřevová and Svědík 2013; Svědík and Tetřevová 2014; Tetřevová and Svědík 2018). According to Anson et al. (2010), mezzanine financing instruments are inserted into the company's capital structure between the "floor" of capital and the "ceiling" of senior debt. The classification of mezzanine financing is based on various criteria, in particular, a mezzanine loan and mezzanine capital (Meluzin and Zinecker 2009;Volkmann et al. 2010). According to Silbernagel and Vaitkunas (2008), mezzanine capital includes senior subordinated debt, convertible subordinated debt and repurchased preferred shares (Silbernagel and Vaitkunas 2008).Considering the analyzed concept from the point of view of Russian approaches, it should be noted that in Russia mezzanine lending is defined as an alternative to the project financing mechanism and is interpreted as a symbiosis of debt financing and equity financing (Petrikova 2014). Of course, the mezzanine is a type of financing, which is characterized by the simultaneous signs of debt and direct investment. In the context of modern realities, taking into account the increased risks...

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Restructuring support for enterprises by banks and guarantee funds

Masiukiewicz

2018

Kwartalnik Nauk O Przedsiębiorstwie

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For efficient recovery of an enterprise in crisis good regulations and financial leverage are necessary. Enterprises and banks in Poland received new efficient law and financial instruments for restructuration in the Restructuring Law. In the future, the priority will be the recovery of enterprises. Banks and saving and loan associations and guarantee funds may play an important role in the recovery processes for enterprises in crisis. The article presents the functions and instruments of banks, including the application of mezzanine capital. Without the provision of “survival capital” by banks or associations, in many situations the restructuring will not be possible. The way in which enterprises see the contemporary support of the banks for restructuration processes is presented in the study conducted under the leadership of the author. In the last years, though, barriers to restructuration existed, e.g. in banks they include risk regulations, capital adequacy and banking tax.

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Mezzanine Capital as A Tool to Increase Enterprise Value in Crisis

Cited by 3 publications

References 0 publications

Mezzanine Financing Instruments in Comparison to the Classic Financing Sources

Mezzanine Financing Instruments in Comparison to the Classic Financing Sources

Mezzanine Financing: Application Practices and Leadership Aspects

Restructuring support for enterprises by banks and guarantee funds

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