LTOjärjestelmät

LTOjärjestelmät refers to Loan-to-Own systems, a financial strategy primarily employed in private equity and venture capital deals. These structures are designed to allow an investor to gain control of a company, typically a distressed one, through a series of escalating financial instruments and rights. The core principle involves the investor providing a company with financing, often in the form of debt. This debt is structured with covenants and conversion features that, if certain performance targets are not met or if specific events occur, can lead to the debt being converted into equity.

The "loan" aspect represents the initial capital infusion. The "own" part comes into play as the debt converts into ownership stakes, potentially increasing the investor's control and eventual equity position over time. This can involve multiple tranches of financing, with each subsequent tranche offering stronger conversion rights or equity participation. LTOjärjestelmät can be a complex way to manage risk for the investor while providing essential capital to a struggling company. The exact terms and mechanisms of LTOjärjestelmät are highly customized to the specific deal and the parties involved. They are often utilized when traditional financing is unavailable or undesirable.