Forum on China Debt Restructure and Market-oriented Debt-to-Equity Swap

Date: 22 - 23 June 2018

Forum Background

At present, China's economy is facing a "three-period superposition", i.e. the shift period of growth speed, the digestion period of earlier stimulus policies, and the clonic period of structural adjustment. The hidden trouble left by the large-scale economic stimulus gradually stands out, including the dramatically increased scale of debts and the increased leverage ratio, which has caused problems such as overcapacity, aggravated corporate financial burdens, shrinkage of profitability, sudden rise of debt risks, and threat to financial security, etc.  In order to deal with these problems, the Chinese government has promptly launched the supply-side structural reform, in which the most important is to implement deleverage, promote the implementation of the market-oriented debt-to-equity swap, and consolidate the basis for the supply-side structural reform.

Some companies are faced with financial difficulties such as high debt ratio and low turnover ratio of accounts receivable. In particular, non-performing assets of the industries with overcapacity represented by steel, coal, real estate, etc. will experience accelerated exposure, and the non-performing loan ratio of commercial banks remains high. On January 19, 2018, the seven ministries and commissions of the Central Committee jointly issued the Notice on Specific Policy Issues in the Implementation of Market-oriented Bank Debt-to-equity Swap, and made clear guidelines on the mode of the debt-to-equity swap, sources of funds, participants, and the scope of the debt-to-equity swap, etc. from the policy level.

On Feb. 7, the executive meeting of the State Council again put forward to deploy measures on market-oriented debt-to-equity swap. As for implementation organizations, apart from banks and insurance, trust companies, State-owned capital investment operation companies, private equity investment funds and other institutions are also allowed to participate in the debt-to-equity swap, effectively extending the buyer's demand for the target creditor's rights. On April 27, the People's Bank of China,  China Banking and Insurance Regulatory Commission, and China Securities Regulatory Commission jointly issued Guiding Opinions on Regulating Asset Management Business of Financial Institutions, encouraging the full use of private-equity products to support the market-oriented and lawful debt-to-equity swap.

In order to turn around the distressed enterprises from debt crisis and discuss how to participate in market-oriented debt-to-equity business to solve such important subjects as currently extra-high corporate leverage ratio, etc., Total Finance and experts of authoritative industry organizations, frontier research, and market practices jointly sponsored the seminar on practices in debt restructuring and market-oriented debt-to-equity swap. Hereby, experts, scholars and practical personnel in the industry are sincerely invited to jointly discuss a path to help out the distressed enterprises.

Core Topics

  • The opportunities and challenges of China's reorganization of creditor's rights in 2018
  • Investment opportunities and difficulties for private equity to participate in the debt reorganization of distressed enterprises
  • Analysis of the pricing mechanism and withdrawal channels of distressed enterprises
  • Vitalizing distressed enterprises through "debt reorganization + debt-to-equity swap"
  • Cutting-edge thinking on the market-oriented debt-to-equity swap under the new regulations on assets management
  • The characteristics and main points of the present round of market-oriented debt-to-equity swap
  • Discussing pain points and difficulties in the non-performing asset management market in China
  • The transaction structural design and implementation mode of the market-oriented debt-to-equity swap
  • Analysis of the practical points of the market-oriented debt-to-equity swap from a legal perspective
  • Local AMC non-performing asset investment opportunity and innovative cooperation mode
  • How do implementing institutions carry out the business of the market-oriented debt-to-equity swap?

Agenda

Day 1 - 22 June 2018

09:00 China's Creditor's rights opportunities and challenges under strict supervision

09:40 Investment opportunities and difficulties for private equity to participate in the debt restructuring of distressed enterprises

10:20 Analysis of the pricing mechanism and withdrawal channels of distressed enterprises

11:00 Turn around distressed enterprises through "debt  restructure + debt-to-equity swap"

11:30 Coffee Break

11:40 Round-table dialogue: Discussing solutions to turn around distressed enterprises from the perspective of "financial restructuring, asset restructuring, equity restructuring, and industrial

14:00 Cutting-edge thinking on the market-oriented debt-to-equity swap under the new regulations on assets management

14:30 The characteristics and main points of the present round of market-oriented debt-to-equity swap

15:00 The transaction structural design and implementation mode of the market-oriented debt-to-equity swap

15:30 Coffee Break

15:50 Analysis of the practical points of the market-oriented debt-to-equity swap from a legal perspective

16:10 Round-table dialogue

  • How do implementing institutions carry out the business of the market-oriented debt-to-equity swap?
  • How does local AMC participate in the market-oriented debt-to-equity swap
  • The advantages of private equity in developing the market-oriented debt-to-equity swap
Day 2 - 23 June 2018

09:00 Analysis of practical points and cases of corporate financial debt reorganization

10:30 Coffee Break

11:00 Analysis of the practical operation mode and practice cases of the market-oriented debt-to-equity swap

12:30 Lunch

14:00 Evaluation and due diligence methods of the market-oriented debt-to-equity swap

14:30 Coffee Break

15:00 Design of the transaction framework of the market-oriented debt-to-equity swap

SPEAKER

Li Shuguang, dean of the Graduate School of China University of Political Science and Law, and director of the Bankruptcy Law and Restructuring Research Center of China University of Political Science and Law

Qin Liping, executive vice chairman and secretary-general of NPA Industry Alliance, and partner of Hylands Anli Law Firm

Fu Wang, deputy chief judge of court VI of civil division Shanghai No.2 Intermediate People's Court

Hang Changyin, specially-appointed professor and doctoral supervisor of KOGUAN LAW SCHOOL OF SHANGHAI JIAO TONG UNIVERSITY, and president of Bankruptcy Law Research Center of Shanghai Law Society

Li Jingan, Chief Strategy Officer of Anhui Goho Financial Asset Management Co., Ltd.

Yang Xiaojie, deputy GM of Shanghai Runwei Investment Management Co., Ltd. (Huarun)

Naifeisha Nihemaiti, partner of Zhonglun Law Firm

Zhang Yu, business restructuring service partner of Ernst & Young (China) Advisory Limited

For more information and registration, please click here.

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