China’s Sinosteel Corp. is on track to be the first state-owned company to convert debt into equity under a new government program for debt-laden companies, which began last month, according to a document reviewed by Caixin. A draft plan to convert Sinosteel’s bank debt into equity holdings for those lenders was submitted to the State Council for approval. The plan sheds light on a national debt-to-equity swap program officially launched in July. Sinosteel Corp., a steel making and resources trading enterprises directly supervised by the central government, would negotiate with its debtors to convert about half of the more than 100 billion yuan (US$ 15 billion) worth of debt owed by itself and its subsidiaries into equity in those firms, according to the plan.
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