Turnaround strategies and recovery of financially distressed quoted oil and gas firms in Nigeria
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Date
2020-06
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FACULTY OF MANAGEMENT SCIENCES, UNIVERSITY OF ILORIN
Abstract
The colossal cost consequences of failed businesses are enormous with serious adverse effect on the expected growth and development of any country. Distressed signals are evidence years before the actual business collapse which give rooms for rejuvenation through application of turnaround strategies. Different turnaround strategies have proved effective and otherwise in different situations. Thus, this study evaluates the turnaround strategies used by financially distressed firms in quoted oil and gas firms in Nigeria. The study adopted a longitudinal design and focused on Nigeria oil and gas
sector. Both primary and secondary data were elicited through structure questionnaire checklists and Nigeria Stock Exchange factbooks from year 2000 to 2018. The sampled firms comprise of those companies that had experienced distress at one time or the other and recovered within the sampled periods using multiple discriminant model. The turnaround strategies considered in the study include; employees' layoff, asset restructuring, management change, debt restructuring and dividend cut. The data was analysed using descriptive statistics, multiple discriminant analysis and Friedman test. The findings revealed that there are significant differences in the turnaround strategies as they improve performances throughout the sampled periods. The study concluded that
the identified turnaround strategies were effective towards the rejuvenation of the distressed firms. It was recommended that strategic actions such as asset restructuring dividend cut/omission among others should be used first in surviving the hard times depending on the cases of distress before resolving to employee 's layoff.
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Keywords
Turnaround strategies, financial distress, oil and gas companies, strategic actions, business enterprise
Citation
OMOLEKAN, O.J. (2019) Turnaround Strategies and Recovery of Financially Distressed Quoted oil and Gas Firms in Nigeria. Ilorin Journal of Management Sciences, 6(1), 40 - 51, Published by the Faculty of Management Sciences, University of Ilorin, Ilorin, Nigeria. http://www.ejournals.unilorin.edu.ng/ijm