Study Of State-owned Enterprises'debt To Equity Implementation

In recent years, the inferior assets of relative commercial banks become larger and larger with the debt ratios of state-owned enterprises getting higher and higher. How to restructure the debts between banks and borrowers has been an outstanding problem in the circulation of economy. Under that condition the State Council set out to implement the debt to equity scheme in August 1999.Since then, the bad debts of commercial banks gradually turned into the stock equity of the four Financial Assets Management Companies. Thus the debtor-creditor relationship between enterprises and banks changes into the operator-shareholder relationship by financial management companies with enterprises. This policy is very significant not only to dissolve the risks of bad assets within commercial banks but also to impulse the innovation of state-owned enterprises.Here on the basis of the analysis of the cause, the status quo as well as the living problem concerning in the debt to equity policy, the terms and the target of its implementation along with the manipulation steps has been stated in detail besides its formation background. Furthermore, the economic effect and the risk types involved have been emphatically analyzed.The thesis studies following contents:1. The status quo and the living problem of state-owned enterprise. Emphasize on the cause of high liability and summarize the relative policy by government to resolve the inferior credits between enterprises and banks as well as its performance.2. The technique of implementation of debt to equity, and its method of operation. Analyze its implementation necessity. The policy of debt to equity is not particular only in China. There are some similar methods aboard that we can learn and use for reference.3. The possible risks in the course of debt to equity, hi allusion to that, some proposes have been put forward to avoid risks.4. According to the basic request of debt to equity action, scheme the debt to equity project of GY Steel Co.,Ltd. And make some suggestions relating to the difficulties during the course of that.