What Is Debt Restructuring? What Are The Ways Of Debt Restructuring?

Debt restructuring means that the creditor agrees with the debtor's agreement or the court's decision to agree to the debtor's modification of the debt terms.

"That is to say, as long as the original debt repayment conditions are revised, that is, the debt repayment conditions determined by the debt restructuring are different from those of the original agreement, all of which are debt restructuring.

However, the following circumstances do not belong to the debt restructuring: (1) the convertible bonds issued by the debtor are converted to their shares according to normal conditions (because the conditions have not been changed); secondly, the debt restructuring occurred during the debtor's bankruptcy and liquidation (at this time should be handled according to the liquidation accounting); (3) the debtor's reorganization (the rights and obligations have not changed materially); (4) the debtor borrows new debts to repay the old debts (borrowing new debts and repaying old debts is actually two processes, and the conditions for repayment of old debts have not changed).

There are mainly four ways of debt restructuring: (1) paying off debts with cash below the debt book value; second, paying off debts with non cash assets; 3. Debt to capital; and 4) modifying other debt conditions.

Among them, the first three kinds are immediate payment of debts, and the latter one is delayed payment of debts.