Full Text Available
Note: Clicking the button above will open the full text document at the original institutional repository in a new window.
Investigating funding board composition and turnaround potential of private firms in financial distress
Thesis (PhD)--University of Pretoria, 2017.
Saved in:
| Other Authors: | |
|---|---|
| Format: | Thesis |
| Language: | English |
| Published: |
University of Pretoria
2017
|
| Subjects: | |
| Tags: |
No Tags, Be the first to tag this record!
|
| _version_ | 1867613480829321216 |
|---|---|
| access_status_str | Open Access |
| author2 | Pretorius, Marius |
| author_browse | Pretorius, Marius |
| author_facet | Pretorius, Marius |
| collection | Thesis |
| dc_rights_str_mv | © 2017 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. |
| description | Thesis (PhD)--University of Pretoria, 2017. |
| format | Thesis |
| id | oai:repository.up.ac.za:2263/62694 |
| institution | University of Pretoria (South Africa) |
| language | English |
| last_indexed | 2026-06-10T12:36:49.486Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UPSpace — University of Pretoria Institutional Repository |
| publishDate | 2017 |
| publishDateRange | 2017 |
| publishDateSort | 2017 |
| publisher | University of Pretoria |
| publisherStr | University of Pretoria |
| record_format | dspace |
| source_str | UPSpace — University of Pretoria Institutional Repository |
| spelling | oai:repository.up.ac.za:2263/62694 Investigating funding board composition and turnaround potential of private firms in financial distress Pretorius, Marius keith@unleashconsult.com Fairhurst, Keith UCTD Business rescue and turnarounds Turnarounds and turnaround boundary Debt and equity funding Secured and unsecured debt Economic and management sciences theses SDG-08 Economic and management sciences theses SDG-16 Thesis (PhD)--University of Pretoria, 2017. Controlling shareholders of private firms may define "value of the firm" in terms of personal utility. They may thus prioritize their personal wealth over the firm. Furthermore, agency-based corporate governance may not apply to privately owned firms. This study looked at managers and owners of private firms as potentially risky decision makers. Financial distress was positioned as a boundary to agency theory-based corporate governance for private firms. Choices of shareholders in respect of board composition and the relationship between board composition and external sources of funding were investigated. Influence on turnaround potential, of management who are also shareholders, was also considered. Data from 104 business rescue plans were used for correlation and multiple hierarchical regression analyses. The mean return to secured creditors was 94 % and the mean return to unsecured creditors was 48 %. Unexpectedly a negative correlation between number of directors and free assets was determined. Yet, in the regression model for return to secured creditors, the significant variables were total directors and free assets. It is concluded that personal surety provided by directors may be detrimental to a private firm's free assets. For unsecured creditors, the significant variables were size; management shareholding, and return to secured creditors. The study was conducted between 2011 and 2016 using secondary data drawn from actual business rescue cases. In conclusion, the agency cost of debt construct was refined and an estimate for the agency cost of distressed debt, was presented. Research findings offer improved insight into agency theory for private firms with a foundation for improved corporate governance models. Theorists may use this research to extend understanding of the theory of the firm and corporate governance. Furthermore bankruptcy and turnaround theory may be enhanced by the findings of this research. Practitioners may use the findings to refine credit risk and pricing models. cb2026 Business Management PhD Unrestricted SDG-08: Decent work and economic growth SDG-16: Peace, justice and strong institutions 2017-10-11T11:56:20Z 2017-10-11T11:56:20Z 2017-09-07 2017 Thesis Fairhurst, K 2017, Investigating funding board composition and turnaround potential of private firms in financial distress, PhD Thesis, University of Pretoria, Pretoria, viewed yymmdd <http://hdl.handle.net/2263/62694> S2017 http://hdl.handle.net/2263/62694 en © 2017 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. application/pdf University of Pretoria |
| spellingShingle | UCTD Business rescue and turnarounds Turnarounds and turnaround boundary Debt and equity funding Secured and unsecured debt Economic and management sciences theses SDG-08 Economic and management sciences theses SDG-16 Investigating funding board composition and turnaround potential of private firms in financial distress |
| title | Investigating funding board composition and turnaround potential of private firms in financial distress |
| title_full | Investigating funding board composition and turnaround potential of private firms in financial distress |
| title_fullStr | Investigating funding board composition and turnaround potential of private firms in financial distress |
| title_full_unstemmed | Investigating funding board composition and turnaround potential of private firms in financial distress |
| title_short | Investigating funding board composition and turnaround potential of private firms in financial distress |
| title_sort | investigating funding board composition and turnaround potential of private firms in financial distress |
| topic | UCTD Business rescue and turnarounds Turnarounds and turnaround boundary Debt and equity funding Secured and unsecured debt Economic and management sciences theses SDG-08 Economic and management sciences theses SDG-16 |
| url | http://hdl.handle.net/2263/62694 |