Converting debt into securities
Conversion of receivables can be made in stocks, bonds (including convertibles), bills.
As part of the work with the Company’s receivables, the company is ranked receivables – stable companies that are temporarily experiencing difficulties with financing are identified.
Debt of such receivables can be converted into bills at a discount (the amount of the bill will be more than the amount owed). The benefit of the debtor is the deferral of the debt and the absence of risks of debt collection in court. The creditor’s benefit is to obtain an unconditional obligation to pay the amount without the possibility of a debtor challenging the basis that caused the debt. In addition, the bill has a greater turnover capacity (it is easier to sell than to cede the requirement from the contract).
A team of experienced corporate law lawyers with practice;
A comprehensive and comprehensive risk analysis
immersion in the client’s business.
Debt of debtors, which could be potentially interesting for the Company in terms of investment or business participation, can be converted into their shares or convertible bonds. It can also use the mechanism of repo transactions in respect of shares, when the receivable will be able to buy back their shares after a certain period of time.
The benefit for the lender is to be able to determine the decisions made by the debitor in relation to the business that he carries out (in the case of obtaining a significant stake), the opportunity to profit from the activities of the debtor, which will cover the initial debt, diversification of activities, expansion of the market (in the case of work in the same market). The benefit for the debtor is exemption from the need to repay the debt, the elimination of the risks of debt collection, including by resorting to foreclosure on his assets and bankruptcy.
We are ready to advise the Company on the implementation of these activities, as well as to accompany the transactions directly.