engleski

The Range of Recapitalization as a Form of Modifying Capital Structure in the Croatian Economic Practice

The issue of financing company development and corresponding current business activities represents a challenge for all companies, both in developed and developing countries. This challenge is more evident in transitional countries since they are facing another problem - adjusting the business and financing to free market conditions. Those countries are forced to create a friendly environment in terms of enabling companies to use all the market mechanisms in the process of financing, as well as to control their capital structure and available factors for its modification. Primarily, this paper is focused on providing an answer for meeting that challenge. Although in the past seventeen years a free market system with all the relevant market mechanisms has been developed in Croatia, a certain analysis with respect to the Croatian economic practice has been made, as Croatia is still involved in the transition process. That system represents a good framework for running a process of financing on a market basis. Although opportunities in that sense are more favorable, there is still an open question considering the volume of their realization. In this paper, the authors put an emphasis on a certain aspect of these perspectives – recapitalization as a form of financing company needs. The key issue is how to make recapitalization competitive to other financial sources, especially to traditional ones. Recapitalization is a subject of analysis considering other aspects, as well ; the way of affecting capital structure, its relation to other financial sources and, in the end, the effects it has on business and company development.

recapitalization; capital structure; transition; investment; development

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