A debt-for-equity swap converted VND 500 billion of pressure into a balance sheet this technology group could grow on. In February 2025, IVLF Advisors LLC announced its successful advisory role in a complex debt-for-equity swap and corporate restructuring for a technology group. The transaction, valued at nearly VND 500 billion, involved intricate multi-party negotiations and a strategic share split.
Deep Expertise Across Finance, Tax, Investment and Law
The engagement drew on IVLF’s combined command of finance, taxation, investment and corporate law. Navigating the transaction’s complexity underscores the firm’s commitment to delivering innovative financial and legal solutions for clients facing multifaceted challenges.
“We are proud to have found the solution that carried our client through this important milestone,” said Nguyen Trung Nghia, Managing Director of IVLF Advisors LLC. “The transaction demonstrates our team’s ability to deliver tailored solutions that meet each client’s distinct needs and create value.”
Transaction Structure
The deal built on IVLF’s recent experience advising a group of companies on a sophisticated debt-for-equity programme encompassing exchangeable debt, convertible debt and a share split – all achieved through a series of carefully structured contractual arrangements executed across the group.
Transaction flow of the VND 500 billion debt-for-equity swap.
Looking Ahead
IVLF Advisors LLC looks forward to supporting clients in similar transactions – from M&A strategy, valuation and due diligence to contract negotiation and full legal execution.
Key Legal References
- Law on Enterprises: share issuance, conversion mechanics and share splits;
- Civil Code 2015: debt instruments, novation and set-off underpinning the exchangeable and convertible arrangements;
- Securities Law (as amended by Law No. 56/2024/QH15): private placement conditions and investor eligibility.
Related practice areas: Banking & Finance · Mergers & Acquisitions · Capital Markets
Facing a similar challenge?
IVLF Advisors LLC advises investors and enterprises on restructuring, M&A, capital raising and cross-border transactions in Vietnam. Contact us for a confidential assessment of your matter.
Debt-for-equity swap: what this case teaches
When does a debt-for-equity swap beat rescheduling?
When the borrower’s problem is the balance sheet, not the calendar. Rescheduling buys time; a debt-for-equity swap removes the debt and gives creditors upside instead of another promise. It suits businesses whose operations are sound but whose leverage is not – exactly the profile of this technology group.
What are the hard legal points?
Valuation of the converted debt, corporate approvals for issuing shares to creditors, foreign-ownership checks when lenders are offshore, and tax treatment of any write-down. Each was resolved in sequence here; skipping any one of them is how a debt-for-equity swap unravels in a later audit or dispute.
How do creditors protect their new position?
Through the same instruments any investor would demand: information rights, board representation proportionate to the stake, reserved matters, and exit provisions – drafted before conversion, when creditor leverage is at its peak.
Execution sequence at a glance
The matter ran in five moves. First, a standstill with the converting creditors so operations could continue while terms were negotiated. Second, independent valuation of both the debt and the equity it would become, agreed by all sides before drafting began. Third, the corporate approvals – shareholder resolutions, charter amendments and the share issuance filings – prepared as one package so no gap opened between agreement and execution. Fourth, the conversion itself, documented with completion mechanics that left no ambiguity about when debt died and equity was born. Fifth, the governance reset: new board composition, reserved matters and reporting, so the former creditors entered as informed shareholders rather than anxious ones. The whole debt-for-equity swap closed without a single day of business interruption – the metric the client cared about most.
Could this work for smaller companies?
Yes. The VND 500 billion figure made headlines, but the debt-for-equity swap mechanics scale down cleanly; we have since applied the same framework at a tenth of the size. The threshold question is always whether the underlying business deserves the equity.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
