CHINA China supports debt-to-equity swaps for non-state firms


China supports debt-to-equity swaps for non-state firms


03:15, January 30, 2018


China's top economic planner said Friday that it supported non-state firms to conduct debt-to-equity swaps, the country's latest move to reduce corporate leverage.

Private firms and foreign-funded firms will be supported to conduct such swaps in a market-oriented manner, said a document released by the National Development and Reform Commission (NDRC).

Debt-to-equity swaps allow creditors to exchange debt for equity stakes so that companies with long-term potential are not forced to default.

This method has been used by state-owned enterprises.

The NDRC also allowed banks to conduct swap programs by raising money through private equity funds.

Tax preferences and low-cost funding support will be provided for companies and banks involved in such programs, according to the document.

Debt-to-equity swaps are part of China's efforts to deleverage its corporate sector and rein in financial risks.

Terms of Service & Privacy Policy

We have updated our privacy policy to comply with the latest laws and regulations. The updated policy explains the mechanism of how we collect and treat your personal data. You can learn more about the rights you have by reading our terms of service. Please read them carefully. By clicking AGREE, you indicate that you have read and agreed to our privacy policies

Agree and continue