Debt Equity Swaps

A debt equity swap is a financial process where a company converts its debt (money it owes) into equity (ownership shares). This typically happens when a company is struggling to repay loans. Creditors may agree to accept shares in return for forgiving some or all of the debt. This helps the company reduce its liabilities and improve its balance sheet while giving creditors a stake in the company’s potential future success. Essentially, it’s a way to manage financial obligations while potentially creating value for both parties involved.