As private debt continues to grow rapidly as a global asset class, investors and asset managers must remain vigilant to the increasing risks that accompany this expansion.
With deal complexity on the rise, these risks are particularly acute in cross-border, high-value credit arrangements.
A coordinated multi-jurisdictional strategy enables creditors to secure more substantial leverage in pursuit of favorable recoveries in response to defaults.
Recent challenging economic conditions in China are putting many PRC companies in distress.
This puts offshore joint venture partners and private credit lenders at risk, potentially having to attempt a difficult recovery by taking over PRC projects, companies or assets.
A new Chinese company law may give investors an upper hand by strengthening their information rights, which when combined with a multijurisdictional strategy allow a more effective takeover.
Unfavorable economic conditions in China are putting many offshore companies in distress.
In a worst-case scenario, joint venture partners and private credit lenders may have to attempt to take over onshore projects, companies and assets.
A new Chinese company law coming into effect on July 2024 could smoot this path to recover – including by making it easier to replace legal representatives.
