Study On The Performance And Risk Of Market-Oriented Debt-for-Equity Swap Of China Shipbuilding Industry Company Limited

From 2008 to 2016,the leverage ratio of China's real economy grew by more than 12% every year,and the leverage ratio of non-financial enterprises reached 116.4% at the end of 2016,significantly higher than that of other countries.Excessive leverage not only aggravates the financial burden of enterprises,damages China's high-quality production capacity and the development potential of periodic high-quality enterprises,but also becomes the source of soaring financial risks.Under the background that " three eliminations,one reduction,one supplement" and preventing financial risks have become urgent tasks in China,a new round of market-oriented debt-for-equity swap was proposed by the government in October 2016,aiming to help enterprises reduce debt and leverage and prevent and defuse financial risks.However,in the actual process of implementation,the signing is more,but the landing scale is small,and the capital arrival rate is only about 20%.In the face of such difficulties,the government issued documents to improve the market-oriented debt-for-equity policy system,and at the same time,encouraged the implementation of institutions to actively innovate the model,effectively implement and maximize the role of debt-for-equity.Based on the marketization of China's first state-owned enterprises listed companies debt convertible project ——Market-oriented debt-for-equity swap of CSICL,as the research object,which innovatively adopted the "two-step" approach to introduce 8 investors for its subsidiaries to conduct debt-for-equity swap,and then repurchased the transferred subsidiary shares through non-public offering shares,which facilitated the rapid implementation of debt transfer,debt-for-equity swap and equity withdrawal.Therefore,this paper mainly studies two issues: one is the performance of the market-oriented debt-for-equity model initiated by CSICL;Secondly,what are the potential risks of this new model that need to be prevented? At the same time,Through the case study,this paper considers the optimization path of the "two-step" debt-for-equity model,and provides suggestions for effectively promoting the current round of market-oriented debt-for-equity swap in China.This paper adopts a variety of research methods,including literature review method,direct observation method,event research method,accounting index method and comparative analysis method.Firstly,this paper clarifies the background and significance of the topic,sorts out the arguments and opinions of domestic and foreign scholars on debt-for-equity swap,and analyzes the relevant theoretical basis of market-oriented debt-for-equity swap.Secondly,this paper analyzes the motivation and scheme of the "two-step" debt-to-equity swap project of CSICL,from the Angle of quantitative and qualitative,focus on the performance analysis,including market performance and financial performance and social effect,and analyze the potential risks existing in the mode and risk factors,to explore corresponding precautions.At last,this paper draws the following conclusions :(1)the short-term performance of the market-oriented debt-for-equity swap is remarkable,the deleveraging effect is outstanding,and the company's asset quality is improved.(2)the long-term effects of this market-oriented debt-for-equity swap need to be verified,and debt-for-equity swap is not the fundamental reason to completely improve the company's operating conditions.(3)there are various potential risks in the implementation of the "two-step" debt-for-equity model,with 8 investors as the main risk bearers.(4)the potential risks of the "two-step" debt-for-equity model can be effectively prevented and solved.At the same time,through case study,it is found that lengthening the "two-step" time interval and introducing the valuation adjustment mechanism are conducive to improving the profit rate of investors or implementing institutions and mobilizing their enthusiasm to participate in the debt-for-equity swap without damaging the interests of listed companies.However,the improvement and effective implementation of the market-oriented debt-to-equity conversion rate need the joint efforts of the enterprises,implementing agencies,governments and regulators.