Debt/Equity Swap

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Debt/Equity Swap

A situation in which a debtor (which is a company) replaces the debt held by one or more creditors with a percentage of ownership in the company. A debt-equity swap often occurs if the company would otherwise be unable to repay the creditor(s) anything without going bankrupt. However, the swap may be a result of change from a debt-based to an equity-based capital structure. In either case, these swaps are often considered part of a company's attempt to restructure itself. Some debt agreements restrict the debtor's ability to force a debt-for-equity swap.
References in periodicals archive ?
Second, there are out-of-court reorganisations, where a company and its advisers negotiate with banks and other creditors to agree to a reduction of debt, often in exchange for equity, known as debt-equity swaps.
47) In order for Islamic banks to succeed in swapping debt for equity in some of the LDCs, these should have a debt-equity swap program in place.
The debt conversion programme may be categorised into (1) conversion of debt service; (2) conversion of existing debt into a new form of debt, called debt-debt swap; and (3) conversion of existing debt into an equity, called debt-equity swap, wherein debt service would be replaced by a dividend according to the terms and conditions of the equity ownership.
under which the trading house operates, said earlier in the day that it has received 370 billion yen in financial aid from key creditor banks in debt-equity swap deals.
Marconi has restructured its finances with a debt-equity swap to tackle its pounds 4bn debt mountain.
KESC Debt-Equity Swap Plan Okayed: The shareholders of KESC approved the debt-equity swap plan by the government and increase in the company's authorized capital.
5 million) debt-equity swap for its trading arm SK Networks.
an affiliated consumer credit company, via a debt-equity swap worth some 10 billion yen.
L TELECOMS group Marconi is already some way down the road to a debt-equity swap but a deal expected to be announced this week has been delayed.
The Financial Services Agency (FSA) plans to enable life insurers to convert themselves from mutual firms into stock companies by taking advantage of a cost-effective debt-equity swap mechanism, a major daily reported Wednesday.
In addition, Seibu will seek help from Credit Saison, an affiliated consumer credit company, via a debt-equity swap worth some 10 billion yen.
has entered talks with its main creditor Asahi Bank and other lenders for 20 billion yen in aid through various capital-replenishing steps including a debt-equity swap, sources close to the deal said Thursday.