The credit crunch will reach another milestone today when Goldman Sachs unveils the revamp of a $7 billion (£3.5 billion) structured investment vehicle (SIV) once run by St James's-based Cheyne Capital.

The SIV, called Cheyne Finance, was one of the largest such portfolios listed on the London Stock Exchange. But as the credit crunch struck, its mixture of assets including mortgage-backed securities became impossible to value and it went into receivership last September.

Now Goldman has come up with a complicated plan that will enable the receivers Deloitte & Touche to auction off the assets, return cash to senior creditors who want it then package up any unsold assets into a new vehicle to be owned by existing creditors and new outside investors.

Goldman will in effect facilitate the restructuring by taking the assets on to its own balance sheet in return for cash for less than 24 hours. That will enable creditors to be paid out before the assets are transferred to the new vehicle.

Goldman is understood to be working on similar projects for at least four other SIVs including Whistlejacket, formerly run by Standard Chartered Bank. In total these assets amount to $18 billion.

The progress of today's deal will be closely watched by financiers around the world.