Banks and equity groups are taking over cash-poor companies to recoup the money they once threw at them.

The tide has turned. Companies great and small have seen their equity values crash and vanish. Treacherous trading conditions and oppressive debt piles have made it difficult for even the best-performing firms to meet their borrowing commitments.

In the wreckage, ownership is silently slipping away from companies, buy-out groups and shareholders. Instead, those who control the debt, not equity, are moving into the driving seat.

They are the new de-facto owners.

These banks, hedge funds and distressed debt players, who until recently were battling their own tsunami of balance sheet problems, are now scanning the horizon to see what they can salvage from the flotsam of their past lending practices.

And, increasingly, as debt-for-equity swap deals such as Monier, Samsonite, Feretti, and McCarthy & Stone prove, they are in an unforgiving mood.

"Look, I'm just a lender who wants to get repaid," says one executive currently in restructuring negotiations. "Give the money back at par, if you can, otherwise we will take the keys. It's that simple."

Up to three-quarters of deals put together in the boom years of 2006-2007 face covenant breaches in the next 12 months and the hardening rhetoric underlines a fundamental shift taking place in attitudes of lenders.

In European buy-outs alone there is €360bn (£314bn) of debt to be repaid before 2018. But the disconnect between the average gearing on those companies at six times Ebitda and the three times Ebitda at which banks now lend, suggests a blood bath to come as debt holders demand their money's worth.

"We've had enough," says a senior lender at a clearing bank. "The capital structures in these companies have relied on ridiculous availability of debt. And now a radical type of restructuring is needed.

"We don't want to look like fools in 18 months after we've written down all our debts just as recovery comes and gives all the company's upside to private equity."

Derek Sach is head of Royal Bank of Scotland's Global Restructuring Group, the bank's custodian department for troubled loans and faltering clients. A former executive at private equity firm 3i, Mr Sach, at 60, is a veteran of the industry and says RBS takes a progressive approach to restructuring.

"What we look for is the underlying viability of the business," he says. "Does the company have anything worth saving?

"It is a business restructuring as well as the financial restructuring that we look at."

Mr Sach founded the pioneering group in the recession of the early 1990s and it has now been replicated by others with Graham Rusling heading a similar unit at Barclays as does Duncan Parkes at Lloyds. "The inappropriate financial structures of the leveraged buy-outs of recent years are just unsustainable," says Mr Sach, adding that the only way to counter failing loans is to take part of the company and profit from the increased value of that stake in years to come. "We have taken lots of equity stakes in the past and we will be taking lots more going forward," he says. "If we are investing more money then we invariably want an equity return. "I know how the PE mind works, I used to one of them," he says. "Commercial bankers are thought of as fair game, but the bank has to be able share in the upside."

Research from PWC suggests that whereas in the last recession companies were dealing with one or two lenders, now they can be faced with a legion of debt holders all in various tranches of the borrowing hierarchy.