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 ?
Donnet said that the firm was not looking to increase its holdings in Italian banks after becoming the second biggest shareholder in bailed out lender, Monte dei Paschi di Siena, through a debt-to-equity swap.
9 trillion won debt-to-equity swap and a 900 billion won debt rescheduling.
2 December 2011 - Portugal's Banco Espirito Santo (ELI:BES) has lifted its core tier 1 capital ratio to 9% through a debt-to-equity swap, thus meeting the requirements of the rescue team for the country's banking system.
86% stake in Slovenian battery manufacturer Akubat for an undisclosed sum, in a debt-to-equity swap deal that makes it the largest shareholder in the firm.
Earlier Wednesday, GM said it has failed to secure the consent of enough holders of GM bonds for its debt-to-equity swap plan.
Lenders took the reins of South Korea's fourth-largest vehicle maker last year through a pounds 561 million debt-to-equity swap that rescued it from collapse.
Commercial banks were also asked to agree to a debt-to-equity swap on 80 percent, or 560 billion won, of the unsecured loans and payment rescheduling of the remaining 20 percent.
Chinese state-owned banks have started to establish their own asset management arms to conduct debt-to-equity swap business for their peers.
9m) debt-to-equity swap of MKB Romexterra's arrears to its controlling shareholder, Hungary-based bank MKB.
The creditors of Brazilian lender, Banco Cruzeiro do Sul SA, are seeking debt-to-equity swap to recover their loans faster.
The firm's creditors, led by the KDB, have been seeking to lower the debt levels through a debt-to-equity swap deal involving the group's flagship subsidiary, Asiana Airlines.
The debt-to-equity swap will help it lift its Core Tier-one ratio to the required 9 percent this year and 10 percent in 2012, BES said, adding that the bank will also seek shareholder approval to increase its share capital to EUR7.