Shanxi Province, China-based Yangquan Coal Industry Group Co., Ltd (YangQuan Coal) has announced that it has inked a debt-for-equity swap agreement with China Bank of Communication.
According to the agreement, Bank of Communication will provide RMB 10 billion for YangQuan Coal to reduce its debt and in exchange Bank of Communication will become a shareholder in YangQuan Coal.
In August 2016, the China Banking Regulatory Commission (CBRC) has 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.