| Reform of the state-owned enterprises (SOEs) has attained outstanding success over the past twenty years. By reforming,organizational overhaul,financial restructuring and management enhancement,SOEs1 management system has been changing and their operational conditions have been improving. And this has in turn been promoting the developments of national economy and the establishment of socialist market economy system.However,compared with other enterprises,the economic benefits of SOEs are still not satisfactory. The Asian Financial Crisis in 1997 has especially exposed fully the grievous problem in the SOEs-the enormous debts owed to state banks. The average debt-to-asset ratio of SOEs in 1995 is 65.81%,and over 90% of the debts are owed to banks. This problem not only affects the further reform of SOEs and the commercialization of state banks but also seriously obstructs the sustainable,stable and healthy developments of national economy. It has got to the critical point to solve SOEs' debt problem.Solving the "triangle" debts among SOEs has been a trial to solve SOEs' debt problem. However,it was shown that SOEs' debt problem is more complicated than what was originally thought. The Asian Financial Crisis made people know more about financial risks,and a program was desperately needed which can simultaneously solve SOEs' debt problem and State banks' non-performing loans problem. "Debt-for-equity swap' was then put forward as one of the programs to solve the bad assets problem,and was further upgraded as a government policy to be implemented. The aim of the policy is,on the one hand,to solve the serious debt problem of SOEs to enable them to be out of predicaments within three years,and on the other hand,to create an opportunity to solve State banks' non-performing loans problem.There are successful international precedents to solve the bad assets problem by way of "debt-for-equity swap". Whether "debt-for-equity swap" will succeed under China's circumstances has raised strong arguments. This is a big problem need to pay close attention and study in the current economic life."Debt-for-equity swap" firstly changes the capital structure of enterprises. Following the capital structure theory,based on statistics and integrating the cases of those enterprises having carried "debt-for-equity swap" programs,this thesis probes into the origination of the bad debts problem of SOEs,the affections of the problem on state banks and the functions of "debt-for-equity swap" in solving the problem,and tries to put forward suggestions to better solve the bad debts problem of SOEs.Part 1 Brief retrospect of the capital structure theoryThe first theory is that the central point of enterprise financial management is the capital structure. The capital of an enterprise comprises equity capital and liabilities,and the owners of the different capitals have different interest claims in the enterprise. There is close links between an enterprise's capital structure and its market value.The second theory is the MM theory which articulates the capital structure of enterprises. The original MM theory has strict premises,and the corresponding theoretic conclusion is that an enterprise can't change its market value by changing its capital structure because the value of an enterprise depends not on the ways ofraising its real assets but on them. The modified MM theory holds that an enterprise can continuously lower its funding cost by financial leverage,The bigger an enterprise's liabilities,the clearer the effect of the financial leverage,and the higher the enterprise's value. Risks and return of investments are the two limiting factors.The third theory is the positive research of an enterprise's optimistic capital structure. It is very important to control an enterprise's debt-for-equity swap ratio because there exists an optimistic objective capital structure.Part 2 Analysis of the capital structure and the economic benefits of SOEsThe author analyzed the statistics in the industrial statistics annals of 19... |
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