Russian law now recognises conversion of debt into equity | Practical Law

Russian law now recognises conversion of debt into equity | Practical Law

This article is part of the PLC Global Finance January 2010 e-mail update for the Russian Federation.

Russian law now recognises conversion of debt into equity

Practical Law UK Legal Update 7-501-3503 (Approx. 2 pages)

Russian law now recognises conversion of debt into equity

by White & Case LLP
Published on 26 Jan 2010 • Russian Federation
This article is part of the PLC Global Finance January 2010 e-mail update for the Russian Federation.
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Speedread

In December 2009, the President signed a new law, amending various pieces of legislation, to introduce the possibility for Russian companies to covert their debt into equity.
On 27 December 2009 the President signed Federal Law No. 352-FZ on debt to equity conversions. The Law entered into force on 31 December 2009.
The Law amends:
  • The Civil Code.
  • The Law on Joint Stock Companies.
  • The Law on Limited Liability Companies.
  • The Securities Market Law.
In particular, it introduces the possibility of converting debt into equity for Russian companies (that is, a company will be able to discharge its debt by increasing its charter capital). This option is not available for credit organisations.
A Special Update will be published soon discussing these amendments in more detail.