China Construction Bank (CCB) signed debt-to-equity swap agreements with Shanxi's State-owned coal businesses –– Lu'an Group and Jinmei Group –– on March 29.

According to the agreement, CCB will set up a 10-billion-yuan ($1.45 billion) fund with each of the two groups, to reduce their debt ratio through debt-to-equity swaps and to promote the innovation and structural reforms of the companies.

It is the second time that CCB has cooperated with Shanxi's coal industry in debt-to-equity swap agreements, with a total investment of 45 billion yuan.

Debt-to-equity swaps have been a core driving force behind supply-side structural reforms. The provincial government is encouraging more cooperation of this kind between banks and businesses.