Jurisdiction(s):
United Kingdom

Key definition

Recapitalisation definition

What does Recapitalisation mean? Recapitalisation describes a corporate restructuring that alters the balance between debt and equity in a company’s capital structure. It commonly replaces debt with equity (for example, a rights issue, placing, open offer or a debt-for-equity swap) or replaces equity with debt (for example, a leveraged recapitalisation or a share buyback funded by new borrowing), and may involve instruments such as preference shares, convertibles or shareholder loans. It is a descriptive term rather than a defined legal concept; the legal mechanics are implemented through company law and, where relevant, insolvency or restructuring procedures. Typical objectives include deleveraging, addressing covenant breaches or financial...

EU State aid: CJEU overturns GC in Monte dei Paschi recapitalisation—burden-sharing is national; Commission’s no-objections decision not binding; bondholders not ‘interested parties’ with standing

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Practice notes

CASE HUB ARCHIVED

This archived case hub sets out the position as at the judgment of 31 January 2023 and is no longer updated.

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Appeal against the General Court’s preliminary judgment of 24 February 2021 in Case T‑161/18, which rejected the Commission’s plea of inadmissibility regarding the Commission’s decision of 4 July 2017 approving Italy’s scheme to support the recapitalisation of Banca Monte dei Paschi di Siena as compatible with state aid rules (SA.47677).

Latest developments

On 31 January 2023, the Court of Justice delivered judgment diverging from Advocate General Rantos and the General Court. It found that the measures cited in the Commission’s decision were neither imposed nor made binding by that decision. Rather, they were solely national steps, notified by Italy under Article 108(3) TFEU on its own responsibility, which the Commission considered as factual context when assessing whether the aid could, absent any doubt, be declared compatible with the internal market at the close of the preliminary examination...

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Web page updated on 26/05/2026

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