A Study On The Effect Of Debt-to-Equity Swap On The Performance Of Enterprises

At present,asset-liability ratio remains high in china,corporate financial pressure is high,commercial banks’ non-performing loans are rising rapidly,and corporate bonds default frequently.In order to solve this existing problems,in March 2016,the idea of market-oriented debt-equity swaps to reduce corporate leverage was first put forward.In October 2016,the State Council issued the "Opinions on Actively and Firmly Reducing the Leverage Ratio of Enterprises" and its annex "Guiding Opinions on Converting Equity Rights of Market-oriented Banks",marking the official launch of this round of debt-to-equity swaps.This paper uses case study to analyze the case of and Yunxi and CCB’s debt-to-equity swaps with Yunxi Group as the main body of the case.Firstly,it introduces the main contents and implementation status of Yunxi Group’s debt-to-equity swap plan,and then analyzes the main motives of the debt-to-equity swap plan from the perspective of Yunxi,and through the analysis of the financial data,market performance,corporate internal governance strategy and so on,draw a conclusion:the debt-to-equity swap program effectively reduced the company’s asset-liability ratio,optimized the capital structure,and improved its financial position.But it is necessary to cooperate with the business strategy to truly help the company’s long-term development.In addition,it is necessary to pay attention to the right to operate and manage debt-to-equity swap institutions.While optimizing corporate management,management decisions may be focused on short-term interests while ignoring long-term development.At the same time,from the perspective of the implementation of debt-to-equity swap schemes,the difficulty to land debt-to-equity swap schemes is also to be solved.Finally,based on the conclusions of the analysis,this paper puts forward relevant suggestions from three aspects:focusing on operational capability,improving information disclosure and controlling management risk.Through the analysis of the case of Yunxi Group’s debt-to-equity swap,I hope that it can be used for the subsequent implementation of debt-to-equity swaps.