RESTRUCTURING DEBT AND INVESTMENT DECISION WHEN THE PANDEMIC COVID-19

The Pandemic Covid-19 impact on all sectros especially the sector economy. Many businesses run into problems economcs and finance who eventually influential in the business they ara restructuring the debt becomes one of the alternative choice that can reduce the problem companies. Restructuring the debt used to help campanies settle liabilities that prossessed her. The government provides restucturing loans for borrowers who have an impact Covid-19 with the rules of the OJK number No.11/POJK03/2020. 

Banking wait step Authority Services Financial (OJK), which refers to the bank anchors within the framework of the policy of restructuring loans banks at the current pandemic covid-19. The Govenment has prepared funds worth Rp35 Trillion for banks experiencing liquidity problems and will be distributed by the anchor bank. Restructuring can be done by various means is namely a decrease in rate of interest debt, extension of the period of time the debt, reduction of principal debt, reduction in arrears interest, additional credit facilities credit and financing, convertion credit participation capital while. Restructuring the debt is the pupose of helping companies are experiecing liquidity at the time of the pandemic covid-19. Then how the company is restructuring seek debt is a solution on the problem is? it must be proved by empirical. 

The agency conflicts of creditors-shareholder have attained huge consideration in the literature. The conflict of interest between creditors and shareholders leads managers to act in the interest of shareholders, and make different choices of debt to equity ratios and maturities of debt to mitigate the risk associated with debt. Firms with risk debt may face a debt overhang problem in the presence of shareholders-credits conflicts. Risky debt may not allow highly levered firms to invest in new investement projects, even if projects have prositive NPV., which results in underinvestment poblem (Bhat,2020). 

Some studies explain that the restructuring of debts run short and the capacity of the debt can help companies to make dicisions financing were efficient and reduce the problem of investment. The reseacrh that is done in China by Bhat (2020) using the companys non-financial in China find short-term associated positively with leverage. Growth is also positively related to leverage. Results of the study also showed that the debt term short which increases also increase the growth of the company. Debt that was is a matter for the company when it in restructuring be debt by repricing and negotiation the contract of debt. According to Johnson (2003) shorten fall due debt can reduce the problem shortage of investment. Based on the description a bove arises empirical questions how short-term debt and debt capacity can be reduce the problem of underinvestment. Johnson(2002) fell due debt short-term debilitating effects of negative growth and opportunities leverage. 

They show that companies with high growth opportunities depend on short- term debt or low leverage to reduce investment problems. Besides that, the debt term short can help companies reduce the problem of investment that is sufficient , and by thus eliminating the impact of negative growth in leverage. 

Research by Brancati(2016),Hang et.al(2020) looked at the debt term short that kept rolling has a risk that high for failure to pay . Results of the study showed that the falling due debts do not lead to failure to pay that much higher. Terms of the risk of debt becomes much higher when it needs liquidity high , the debt that expired and shortage of sources of funds to pay off debts that . Mihalache (2020) examined the failure of debts settled by restructures back the debt through negotiation repeated and implemented to swap bonds and then resume payment of the debt back . Relief on an debt could be done by extending the period of repayment of debt . Research by Nguyen, et. , al . 2013 tested total leverage against the return of shares by focusing on the ratio of debt were extended . Ray (2020) examined whether the earnings management affect the structure fell due debt in Negarai Italy. This study uses accrual quality as a proxy for earnings management . Results of the study showed earning management  associated negatively with debt term long. Research is recommend managers must plan the structure of finance , giving loans and creditors in the process making decision that would later will affect the external . Seta (2019 )  gives the view that the debt short-term in moral and indicates that the financing and the determination of the price of the debt that is fair , debt short-term produce incentives for taking risks .

Based on the description of the literature that describes the relationship restructuring of debts run short with decision investment at the time of the pandemic covid-19 then can be drawn conclusions while that the restructuring of the debt that was taken by the company should be is debt term short which has a risk of more minor than the debt term long . Debt -term short which restructured relate positively to the growth of the company . This means that companies are still able to carry out investments in sectors other because the company actually has been able to predict the ability of the company to run short so that can take decisions of investment is evidenced by research Bath ( 2020), Johnson ( 2003 ), Seta (2019).