Research On Motivation And Economic Consequences Of Market-Oriented Debt-to-Equity Swap

Since 2011,the leverage rate of Chinese enterprises has continued to rise,bank non-performing loans have increased year by year,and corporate debt has increased sharply.This has caused problems such as overcapacity,compression of profit margins,sharp rise in debt risks,and endangering financial security.China’s economy is facing a "three-phase superposition".In this context,the government promptly introduced supply-side structural reforms,the most important of which is deleveraging.In 2016,the market-oriented debt-to-equity swap,which is an important starting point for deconstruction,was officially launched.As of the end of 2020,the scale of market-oriented debt-to-equity swap investment exceeded 1.6 trillion yuan,which effectively reduced corporate debt pressure,and achieved remarkable results in reducing leverage and resolving nonperforming loans.At present,in response to the severe and complex domestic and foreign epidemics and the downside risks of the world economy,the central government has made clear arrangements,requiring that the “six stability” work be effectively carried out,the “six guarantees” task should be implemented,effective investment will be actively expanded,and industry reengineering and upgrading will be promoted.,Deepen the reform of the economic system in an all-round way.In this context,it is even more necessary to increase efforts to promote the increase,expansion,and quality of debt-to-equity swaps to fully serve the steady and healthy development of the real economy.This article selects Valin Steel as a research case.Valin Steel is the first case in which a local state-owned enterprise has implemented market-based debt-to-equity swaps and successfully landed.The combination of market-based debt-to-equity swaps and restructuring is of great research meaning.This article chooses to use case study methods and comparative analysis methods to deeply analyze the motivations and economic consequences of Valin Steel’s market-oriented debt-toequity swaps,which can provide a certain feedback on the effect of my country’s——take Valin Steel for example market-oriented debt-to-equity swaps.The research content of this article has six chapters:The first chapter is the introduction,mainly from the following four aspects:the research environment and meaning of this article,research structure and content,research methods,the main contributions and shortcomings of this article.The second chapter is the literature review,which is divided into three parts:the definition of conceptions,the motivation of debt-to-equity swaps,and the research on the economic consequences of debt-to-equity swaps.First,the concept of debt-to-equity swaps is defined,and the policy-based debt-to-equity swaps and market-oriented debt-to-equity swaps are compared and defined from multiple angles.Then this article lays the foundation for this article’s research by combing and reviewing the research on the motivation and economic consequences of debtto-equity swaps by domestic and foreign researchers.The last section summarizes the content of this chapter and proposes the research direction of this article.The third chapter is the theoretical analysis part of market-oriented debt-toequity swaps.The first section of this chapter discusses the theoretical basis of my country’s market-oriented debt-to-equity swaps,and believes that trade-off theory,agency cost theory,and stakeholder theory are the driving factors for marketoriented debt-to-equity swaps.Then it analyzes the motivation and overall status quo of my country’s market-oriented debt-to-equity swap.The last section is the analysis dimension of the economic consequences of market-oriented debt-to-equity swaps.The fourth chapter is a detailed analysis of the case company Valin Steel’s introduction and the market-oriented debt-to-equity swap implementation plan,focusing on the analysis of the reasons for Valin Steel’s market-oriented debt-toequity swap,from policy support,industry cyclicality,and the company’s own difficulties.Partially expand.The fifth chapter is the core content of this article,that is,the research and analysis part of the economic consequences of the case company Valin Steel’s debtto-equity swap.This chapter is divided into four parts to study the economic consequences of Valin Steel’s market-oriented debt-to-equity swap from the four aspects of market reaction,capital structure,corporate governance,and financial performance.The sixth chapter is the conclusion and recommendations of this article.Based on the analysis of the motivations and economic consequences of Valin Steel’s market-oriented debt-to-equity swaps in the full text,the conclusions of this paper are summarized,and relevant countermeasures and suggestions to improve and promote the implementation of market-oriented debt-to-equity swaps are put forward.The main contributions of this article are as follows.1.From a research perspective,this article analyzes the motivations and economic consequences of Valin Steel’s market-oriented debt-to-equity swap,and evaluates the economic consequences of its debt-to-equity swap from four aspects:market response,capital structure,corporate governance,and financial performance.The research has constructed a set of research and analysis dimensions of the economic consequences of market-oriented debt-to-equity swaps,which supplys a certain allusion for other firms trying to carry out market-oriented debt-to-equity swaps.2.In terms of research methods,this article uses the event research method to study the market reaction of Valin Steel’s market-oriented debt-to-equity swaps;and uses the comparative analysis method to research its financial status.Using the entropy TOPSIS method to construct a comprehensive evaluation system for the financial performance of Valin Steel’s market-oriented debt-to-equity swaps can provide market-oriented debt-to-equity swaps with a way to build a financial performance evaluation system.3.In the design of countermeasures,this article starts from the research conclusions on the motivation and economic consequences of Valin Steel’s marketoriented debt-to-equity swap,and combines the overall status of my country’s market-oriented debt-to-equity swaps,and proposes practical significance for companies to successfully carry out market-oriented debt-to-equity swaps.Suggestions for countermeasures.