Loan-to-own strategy

Specia­li­zed inves­tors try to realize the value of non-performing loans by swap­ping them for shares in the company, usually without consul­ting manage­ment or the exis­ting share­hol­ders, in order to parti­ci­pate in the expec­ted increase in the value of the company. If successfully imple­men­ted, this stra­tegy can gene­rate high returns or prevent bad debts in the event of impen­ding insolvency.