Analysis On The Effect Of CICC Gold’s Market-oriented Debt-to-equity Swap

With the slowdown of global economic growth,our country’s economic development has entered a period of high-quality development.The leverage ratio of non-financial companies has been high,which has seriously dragged down the development of the real economy.In order to help companies get out of trouble,the state has implemented a new round of debt-to-equity swaps.While debt-to-equity swaps have achieved certain successes,there are also some common problems,such as the suspicion that debt-to-equity swap implementing agencies have real debts,the profitability of companies has not improved after the debt-to-equity swaps,and the corporate governance structure is chaotic.In this context,CICC Gold creatively proposed the "debt-to-equity swap + high-quality asset injection" model,which is the first company in the market to use this model,which has certain reference significance.This article hopes to start with the micro-case of CICC Gold to study the value logic and application effects of the implementation of market-oriented debt-to-equity swaps under the background of state-owned enterprise mixed ownership reforms and the reduction of bank non-performing loan ratios,and whether the new model of CICC Gold has solved the problem Common problems in debt-to-equity swaps,and what are the experiences that can be used as reference for subsequent debt-to-equity swaps.This article is based on the agency cost theory,MM theory and trade-off theory,and signal transmission theory,to analyze the operation process and implementation effect of CICC Gold’s market-oriented debt-to-equity swap.First,this paper analyzes the operation synergy effect from two aspects of resource integration and copper product revenue.Secondly,select the closing price of the company and the closing price of the Shanghai Stock Exchange Index to explore the impact of the debt-to-equity swap event on the capital market after the company resumes trading.Thirdly,based on the financial data disclosed in the announcements and audit reports of listed companies,use financial ratios and radar charts to analyze the financial effects horizontally and vertically.Finally,after the two steps of subsidiary capital increase and share expansion and the parent company’s issuance of shares to purchase assets,the changes in the corporate governance structure are analyzed separately.From the above analysis process,the following conclusions can be drawn: First,the market-oriented debt-to-equity swap of CICC Gold meets the compliance requirements,and there is no risk of real debt.Second,CICC Gold has obtained short-term market positive However,in the long run,investors are not optimistic.Third,after the debt-to-equity swap,CICC Gold successfully reduced its asset-liability ratio and optimized its capital structure;in addition to the lack of improvement in operating capacity,its solvency and profitability Significant improvement in China’s investment and growth capabilities.Fourth,the equity structure of CICC Gold is more diversified and decentralized,and the controlling shareholder remains unchanged,which is conducive to the preservation and appreciation of state-owned assets.Fifth,the application of CICC Gold’s innovative debt-to-equity swap model The effect is worthy of recognition.Sixth,CICC Gold’s successful experience of market-oriented debt-to-equity swaps can be applied to companies that have the same problems.Based on the above case study,this article puts forward corresponding suggestions on the debt-to-equity swap project.It believes that debt-to-equity swap enterprises need financing,but also need to allow institutional investors to truly participate in corporate management;companies should expand financing channels and make use of debt-to-equity swaps to continuously innovate financing The effectiveness of the model can maintain and increase the value of assets;companies can inject high-quality assets through debt-to-equity swaps,appropriately broaden their business scope,and enhance their ability to resist risks.