A Case Study On The Motivation And Economic Consequences Of Private Enterprises’ Participation In Debt-to-equity Swap

In order to support the development of private economy and promote China’s industrial upgrading,the debt-to-equity conversion policy should reasonably consider the characteristics of private enterprise management so that private enterprises can also enjoy the policy dividend fairly.After summing up the limited cases of private enterprise debt-to-equity conversion,it is found that it has the characteristics of industry concentration,good qualification and various modes of debt-to-equity conversion.This leads to the difficulties of private enterprises’ participation,such as low leverage ratio,inconsistent qualifications,relatively nonstandard operation and not easy to meet the policy requirements of debt-to-equity conversion.After understanding the general situation of private enterprises,this paper will focus on the successful case of private enterprise debt-to-equity conversion —— the analysis of Yuanxing Energy.This paper carefully analyzes the implementation rules of the debt-to-equity swap and refers to the public disclosure information,so as to make a general judgment and summary of the participation motivation of both parties.Next,the paper analyzes the rationality of the pricing and the capital structure of the conversion,and thinks that the pricing is basically fair,and the capital structure also makes the enterprise have the feasibility of carrying out the debt-to-equity conversion.Then through the financial indicators,stock price fluctuations and the cost of Yuanxing energy to pay the three dimensions of economic consequences,it is found that Yuanxing energy liquidity improvement,long-term and short-term debt structure optimization,stock significantly boosted.And the cost of Yuanxing is in the reasonable range of long-term debt cost.Finally,based on the current situation of private enterprise debt-to-equity private enterprises and in-depth analysis of Yuanxing Energy,some suggestions are put forward,which suggest that " fake shares,real debts" meets the actual needs of enterprises and financial institutions;communication and in-depth cooperation between private enterprises and financial institutions may require a bridge between local governments;insurance funds and social capital meet the needs of the duration and risk of debt-for-equity funds,and should continue to issue detailed guidelines;In addition,the cumbersome and inconvenient pricing and exit mechanism,as well as the strict scope of debt-to-equity conversion restrictions,to some extent hinder the in-depth promotion of policy,in the future need to gradually remove obstacles in order to create a more suitable business environment for private enterprises.