One of the methods used in corporate rescue situations like judicial management and schemes of arrangement is the equity for debt swap. You pay your debts will shares instead of cash.
You can bet that creditors will be extremely unhappy with this. However, if saving the company gives them a better return that immediate winding up, they should consider it. Some factors that might be important are how are the shares valued, and how much would the creditors end up with at the end of the rescue package. Also important, how much control will the existing shareholders have after the whole process.
The US car giants General Motors and Chrysler are now undergoing bankruptcy with steps taken to try to save at least part of their business operations. Although US laws are rather different from Singapore laws, we can still see the equity for debt swap. Union workers, and company bondholders have all been offered shares in the new entity in return for giving up their debt claims against the company.
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