Does Restructuring Improve Performance? An Industry Analysis Of Nigerian Oil & Gas Sector

Abstract

This paper assesses whether restructuring improve the performance of firms by conducting an industry analysis of the oil and gas sector in Nigeria. The study is limited to a sample of pair companies listed on the Nigerian Stock Exchange (NSE) drawn from the sector. Data were collected from the NSE Factbook and Annual Statement of Accounts and Reports of the firms. Comparisons are made between the mean of 3-years pre-restructuring and 3-years post-restructuring financial ratios, while the year of restructuring is exempted. Using financial ratio analysis and paired ‘t’ test, the study reveals that restructuring has significant effects on profitability, liquidity and solvency of the firms. Also, there is improvement in the firms’ performance after the restructuring. It recommends that restructuring   should not be use to keep failing business alive but to increase competitiveness and financial standing and management should also instill discipline upon itself so that the continued existence of the firm is not jeopardized.

Keywords: Restructuring, Firm Performance, Mergers and Acquisitions, Oil and Gas Sector, Nigeria, Financial Ratio Analysis, Paired ‘t’ test.