The full form of CDRS is Corporate Debt Restructuring

Corporate debt restructuring is the reorganization of a distressed company’s outstanding obligations to restore its liquidity and keep it in business. It is often achieved by way of negotiation between distressed companies and their creditors, such as banks and other financial institutions, by reducing the total amount of debt the company has, and also by decreasing the interest rate it pays while increasing the period of time it has to pay the obligation back.

Occasionally, some of a company’s debt may be forgiven by creditors in exchange for an equity position in the company. Such arrangements, which often are the final opportunity for a distressed company, are preferable to a more complicated and expensive bankruptcy.

The need for a corporate debt restructuring often arises when a company is going through financial hardship and is having difficulty meeting its obligations, such as debt payments. Put simply, a company owes more debt (and debt payments) than it can generate in income. If the troubles are enough to pose a high risk of the company going bankrupt, it can negotiate with its creditors to reduce these burdens and increase its chances of avoiding bankruptcy.