The inconvenient ban on debt-to-equity swaps is finally lifted in Belarus.
The inconvenient ban on debt-to-equity swaps is finally lifted in BelarusCurrent corporate law in Belarus does not allow shareholders to set off their obligation to make a cash contribution to share capital against existing debt that the company owes them. As a legal experiment this possibility was introduced three years ago only for Hi-Tech Park residents in the form of convertible loans. With the entry into legal force of amendments to the Company Law and the Civil Code, debt-to-equity swaps will now be available to all companies. The new law modifies the rules so that a set-off as described above will be possible for additional contributions to share capital (but not the initial formation of share capital).
This solution will also be available to creditors of a company, who may become shareholders through this procedure, which is envisaged for both limited liability companies and stock companies.
Certain limitations on using this vehicle are introduced for state-owned companies.
The new rules come into legal force on 28 April 2021.