| In June 1st,2007,Law of the People's Republic of China on Enterprise Bankruptcy was published in China.The law,which was designed to remove the legal barriers for the bankruptcy of listed companies,also offers a large number of listed companies on the verge of bankruptcy more choices.The new bankruptcy law divides the company's bankruptcy into liquidation,reconciliation and reorganization,and reorganizes it as a primary means of operation.The bankruptcy reorganization system is a significant progress in the new bankruptcy law,providing an opportunity for companies that are struggling with debt difficulties to achieve transformation and rebirth.However,bankruptcy reorganization is a costly program,and involves the interest of a large number of people,the performance of a company after bankruptcy reorganization is also various.Scholars study on it from different angles such as mode selection,reorganization value assessment and the performance of a company after bankruptcy reorganization,putting forward a number of constructive views.This case study chooses the case of a listed company,CNNC Hua Yuan's bankruptcy reorganization,and explore the impact of bankruptcy reorganization on the related parties and the company by analyzing company performance.CNNC Hua Yuan was a former state-owned enterprise on the verge of bankruptcy,and the bankruptcy reorganization program introduced a new controller to the company.Finally the company turned around without changing main business.The reorganization of CNNC Hua Yuan also has its own characteristics.The reorganization and follow-up mergers are closely linked,so the case can be a strong reference for other enterprises.The study of this case is divided into five parts.The first part is the introduction of the research background,research significance,research content and methods.The second part introduces the concept,procedure and mode of bankruptcy reorganization,and summarizes the research situation at home and abroad.The third part mainly introduces the status quo of the bankruptcy and reorganization of listed companies in China,the basic information of CNNC Hua Yuan,the reorganization path and the reorganization plan,laying the foundation for the analysis of the next part.In the fourth part,the case of CNNC Hua Yuan is studied comprehensively through the analysis of bankruptcy reasons,the value of reorganization and the performance of reorganization.First of all,in the analysis of bankruptcy reasons,this paper points out that increase of raw material prices,product market downturn and other external factors increased the loss of CNNC Hua Yuan,but the root cause is the loopholes of internal control.Shareholders can not really control the management layer.The CNNC Hua Yuan's reform value was also analyzed.In the part of performance analysis,the case study uses event research method and financial analysis method to carry out short-term and long-term analysis on the performance of reorganization.Through the analysis,we can get several conclusions.First,compared to bankruptcy liquidation,bankruptcy reorganization of CNNC Hua Yuan protects more of the creditors' interest,as well as bringing out social benefits;Second,the short-term effect of investors to the related news shows strong positive response,and the long-term financial performance analysis shows that the financial situation of the company also gradually improved after the bankruptcy reorganization.The main reason is that the reorganization reduces the debt pressure through the financial reorganization,and subsequent acquisition changed the old management model,solved the problem of internal control loopholes.So the result of reorganization effect depends on whether the reorganization plan can solve the company's key problem.Finally,this case study puts forward the problems and risks exposed in the case,including the singleness of the designated managers of the court and the less concerned about the follow-up implementation of the debtor's business plan.In the fifth part,the study offers the revelation and suggestion.The case of CNNC Hua Yuan shows: First,the company should be wise to look at the effect of bankruptcy reorganization,and select the appropriate reorganization mode.If the enterprise still maintains core assets or technology,then choosing the business retention mode is more appropriate.Second,if a company chooses the business retention mode,follow-up asset restructuring will be the key point.In general,reorganization can only change the temporary financial situation of enterprises,Only by follow-up asset restructuring can a company improve the profitability.What's more,in order to solve the problem in the process of bankruptcy reorganization,the study puts forward the following suggestions: First,the reorganization plan makers should innovate and reorganize the mode according to law,and the court can collect the detailed case information for later reference.Second,the court should try to enrich the regulations of bankruptcy reorganization process.They can also increase cooperation with the SEC to solve the problems mentioned in the third part;Finally,the government should weaken the intervention during bankruptcy reorganization as well as improve the delisting mechanism.If too much resources have been given to the enterprises that is actually difficult to be saved,it is inevitable that other potential enterprises can only obtain fewer,resulting in waste of resources. |
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