Hebei Province-based Chinese steelmaker Hebei Iron and Steel Co. (Hebei Steel) has announced that it has inked a debt-for-equity swaps agreement with China Construction Bank Co., Ltd (CCB).
According to the agreement, CCB will provide RMB 20 billion for Hebei Steel to reduce its debt and in exchange CCB will become a shareholder of Hebei Steel.
In August 2016, the China Banking Regulatory Commission (CBRC) stated that bank debts of Chinese steel and coal enterprises which are struggling to repay them may be converted into equity in the enterprises. The debt-for-equity swaps would reduce the debt burden on the coal and steel businesses and ease the financing difficulties experienced by the coal and steel industries and allow them to embrace better development opportunities.