First of all, debt in emerging markets is not the same as debt in the West. A company cannot endlessly take debt, even if it continues making losses, simply because in such a situation, the government often intervenes - with a heavy hand.

Look at guys on the run such as Vijay Mallya or Nirav Modi, former tycoons who ended up mired in debt, and who are currently wanted by the government. Another tycoon, Anil Ambani, is only able to stay back in India and fight out a case in court, after being bailed out by his ultra-rich brother's wealth and ties to the government.