Bailouts And Bankruptcies: Corporate Distress, Troubled Debt Restructurings And Equity Stripping

Saibal Ghosh and Ashiana Salian
Additional contact information
Ashiana Salian: Centre for Advanced Financial Research and Learning (CAFRAL)

Working Papers from Centre for Advanced Financial Research and Learning (CAFRAL)

Abstract: We investigate the debt restructuring process and outcomes for a sample of 483 firms that undergo corporate debt restructuring (CDR) between 2002 and 2013. 58 firms exit successfully, 71 are unsuccessful or withdrew and the rest await resolution. Firms that exit successfully are more profitable and less levered entering the CDR process and spend longer times in restructurings. Little net equity enters CDR firms, while there is some evidence of equity stripping, particularly in firms with greater promoter control. The lack of coordination between creditors and interestingly, across different bankruptcy forums, impedes restructuring. The changes in the types of firms entering the CDR process in recent years appears to indicate lower Kaplan-Meier survival rates, although the insufficient passage of time makes the conclusion tentative.

Keywords: Corporate debt restructuring; ownership, equity stripping; hazard; India (search for similar items in EconPapers)
JEL-codes: G3 G34 (search for similar items in EconPapers)
Date: 2018-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cafral.org.in/sfControl/content/Speech/1182016105304AMCDR.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:cafral:022334

Access Statistics for this paper

More papers in Working Papers from Centre for Advanced Financial Research and Learning (CAFRAL) Contact information at EDIRC.
Bibliographic data for series maintained by Vijayshree ().