The Case Study On Marketed Debt-to-equity Swap Of Huarong Energy

Nowadays,China's economy is in the three periods superimposed of the new condition,some industries have serious overcapacity,corporate debt significantly expanded,The leverage rate increased year by year.The high leverage rate of enterprises leads to the increase of bank asset quality pressure and the increasing of non-performing loan ratio.Debt-to-equity swap as a new method of the enterprise business to decline the leverage,bank asset preservation of a new type of debt restructuring which China was restart 17 years later.Comparing the difference with the previous round,the current debt-to-equity swap in accordance with the principles strictly of the market economy to market-oriented operation,that is the debt-to-equity swap.At the same time,the market for debt-to-equity swap is fit for the temporary difficulties but which has great potential for development of high-quality enterprises,reduce the quality of corporate leverage and accelerate the disposal of non-performing assets of banks.With the development of market oriented debt-to-equity swap in China,it is a great practical significance to study the operation of corporate debt-to-equity swap.Huarong energy(former Rongsheng Heavy Industries Group Co,Ltd)is China's first private enterprise of shipbuilding that be listed on the Hong Kong stock market,The debt-to-equity swap of Huarong energy is the first case that China economy-market never does.In this paper,The debt-to-equity swap of Huarong energy marketization which is a typical event as the research intent,From the market debt operation conditions,Operation design,operation process and the implementation effect of debt to equity point of view,Analyzing the operation mechanism of Huarong energy marketization with debt-to-equity swap.In terms of the operating conditions of the debt-to-equity swap,From the perspective of multidimentional analysis,It is concluded that under the condition of favorable policies,The support of financial institutions,The provision of convenience in Hong Kong stock market and the exception of <Bank Law> In the aspect of debt for equity swap operation,The operation mode of “debt-to-equity and debt-to-debt” is analyzed in details,And the basis of“debt-to-equity and debt-to-debt” operation process design of “Transfer+debt for convertible bonds” Mode.In the process of debt for equity swap,The main issue in the operation process,Such as the establishment of the discount rate,The initial premium rate of the convertible bonds,the response of the non-dividend and non-debt that analyzes the market effect of thedebt-to-equity swap system by using the case study method,and valued the debt structure from the perspective of capital-structure,capital-cost,shareholding-structure,the value of multi-angle evaluated off the financial effect on debt-to-equity swap.Through analysis of the operating conditions,the operation design,the operation process and the effect of the debt-to-equity swap,concluded the relevant enlightenment and suggestions on the operation of the enterprise's market-oriented debt in our country.Through the analysis of Huarong energy marketization debt-to-equity swap,the study found that the enterprises should take full consideration of the operating conditions of market-oriented debt-to-equity swap,the mode of operation of market-oriented debt and the operation process design,in the market with debt to convert the operating conditions on the basis of diversification of debt conversion mode of operation;in the marketization operation process of debt-to-equity swap,the ratio of the debt-to-equity swap,the design for the debt-to-equity swap provisions;coping the suspension of the debt and “Non-stock non-debt”,the interests within balance is the key point to every participants,dealing with the important issues to run a good effection on debt-to-equity swap of marketization.