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Conversion of debt into securities

Conversion of debt securities

Conversion of receivables may be made in shares, bonds (including convertible), notes.

Through the work with accounts receivable, the Company made the ranking of debtors, identified stable company, experiencing temporary difficulties with the financing.

The indebtedness of such debtor may be converted into bills of exchange at a discount (the amount of the bill becomes more than the sum of the debt). The benefit of the debtor – deferred debt and no risk of collecting the debt in court. The benefit of a creditor obtaining an unconditional obligation to pay the amount without the possibility of challenge by the debtor of the grounds on which the indebtedness occurred. In addition, bill has more oboronosposobnost (it is easier to sell than give up the requirement from the contract).

Our advantages

A team of experienced lawyers in corporate law with an established practice;

a comprehensive analysis of the risks;

immersion in the client's business.

The debt receivable which could be potentially interesting for the Company from the point of view of investing or participating in business, can be converted into their shares or convertible bonds. It also can be used mechanism of REPO transactions in relation to shares, when the debtor will be able to redeem their shares after a certain period of time.

The benefit for the lender is able to determine decisions made by the debtor in respect of the business which it conducts (in case of receiving a significant package of shares), the opportunity to profit from the activities of the customer that will cover the initial debt, diversification of activities, the expansion of the market (in the case of one market). The benefit for the customer is exempt from the need to repay the debt, the elimination of the risk of debt collection, including foreclosure on its assets, and bankruptcy.

We are ready to advise the Company on exercise of listed activities and to accompany the transaction.