Changes made last year by the United Kingdom Listing Authority (UKLA) to its listing rules could give equity investors a much bigger role in debt restructuring.
Equity holders traditionally have a limited say in debt-for-equity swaps and company delistings, both of which have been used to effect debt restructurings. Share cancellations need shareholder consent, as does an increase in share capital. And if shares sold to a newco are worth more than 25% of the value of the selling company, the sale is a class one transaction under UKLA rules and also needs shareholder approval.
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