In the medium to long term, Beijing will have to use a mix of deleveraging strategies, including debt restructuring, genuine debt-equity swaps
(not the ones that it is implementing) and write-offs through bankruptcy of zombie companies, and austerity measures by cutting local government borrowing and excess capacity to diffuse the danger of a debt-bomb explosion over time.
The fact that commercial banks are not allowed to hold shares in companies has also impeded deleveraging, as it prohibits the use of direct debt-equity swaps
to reduce SOE debt.
The Fund s investments focus on rehabilitating operationally strong but financially distressed companies via restructuring, rescheduling, refinancing, debt-equity swaps
, liquidity management.
Thankfully, there are innovative means available to that end (substitutional investments, debt-equity swaps
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
have also become popular, as has M & A, either by strategic buyers or financial buyers.
is an ideal investment for Islamic banks, since it conforms to the Islamic banking philosophy.
Debtor attitudes: Debt-equity swaps
are regarded as the most promising blueprint for restructuring.
Did firms undertake debt-equity swaps
for an accounting paper profit or true financial gain?
These suggestions include case-by-case rescheduling, interest rate capitalisation schemes, debt-equity swaps
, debt-nature swaps, debt-education swaps and even debt-AIDS swaps.
Government assets may be allocated price tags for the purpose of debt-equity swaps
The practice of using debt-equity swaps
or debt-debt swaps to reduce the debt overhang of developing countries has given rise to an active controversy.