Research On The Motivation And Financial Impact Of Debt To Equity Swap In XX Group

In the current economic situation,China’s enterprises are generally faced with the problems of excessive debt scale and high leverage ratio.At this time,debt to equity swap as an effective means to reduce leverage and de inventory has become the focus of attention again.This round of debt to equity swap is totally different from the debt to equity swap implemented in China in 1999.It is dominated by commercial banks and based on the principles of legality and marketization.At present,state-owned enterprises account for a large proportion in the cases of debt to equity swap in China,but it is still a topic worthy of attention for private enterprises to reduce the leverage ratio and seek long-term development through debt to equity swap.This paper selects the first private enterprise XX group debt to equity swap case,and makes an in-depth study on whether debt to equity swap can improve its capital structure,change its financing ability and enhance the enterprise value.This paper summarizes the research status of debt to equity swap,analyzes the debt to equity swap of XX group on the basis of relevant theories,and expounds the specific implementation plan,debt causes and equity swap motivation of XX group.This paper discusses the short-term and long-term effects of XX group’s debt to equity swap on its finance from three aspects of capital structure,financing ability and enterprise value.The main conclusions are as follows: the debt to equity swap improves the capital structure of XX group,changes have taken place in the equity structure and debt structure,playing a positive financial leverage effect,effectively reducing the financial risk of enterprises;after the debt to equity swap,the capital market of XX group has a negative attitude,but it is unable to accurately judge the specific impact of this event on the stock price,expand the scale of enterprise financing,and reduce the financing cost Through the free cash flow method and EVA index,the enterprise value of XX group after debt to equity swap is calculated,and it is found that debt to equity swap can enhance the enterprise value,which is conducive to the long-term and healthy development of the enterprise in the future.Through the relevant analysis of XX group case,we can understand the motivation of market-oriented debt to equity swap between banks and enterprises,the reasons why commercial banks choose target enterprises for debt to equity swap,the specific implementation mode and process of market-oriented debt to equity swap scheme,and the financial impact of market-oriented debt to equity swap on private enterprises,which has certain reference value for other domestic private enterprises in urgent need of debt to equity swap.Although the implementation of market-oriented debt to equity swap has achieved initial results,it still faces a series of risks.Based on the case of XX group,this paper analyzes the problems and risks that should be paid attention to in the current marketoriented debt to equity swap in China,and puts forward corresponding suggestions,which has certain guiding significance.