Study On Legal Issues Of Equity Repurchase Terms In Market-oriented Debt-to-Equity Swap

The State Council released guidelines on banks' market-oriented debt-to-equity swaps(DES)on October 10 th,2016,triggering a new round of debt-to-equity swaps in our country.In these DES projects,equity repurchase terms are widely applied as withdrawal channels.Embedding equity repurchase terms may change the nature of DES projects,and different contents in equity repurchase terms affect the running direction of DES projects.However,due to the unsound institution,there are a series of issues in the course of applying equity repurchase terms.On the one hand,such equity repurchase terms have practical problems in legal attribute,legal effect and legal application,and they all need to be further discussed both in theoretical and judicial practice field in case of trapping a dilemma during the performance of contract.On the other hand,equity repurchase terms would lead to shareholder heterogeneity of debt-to-equity swap implementing agencies.It will bring new challenges in corporate governance for debt-to-equity swap enterprises,and it also needs to search for the basis in theory and establish clearer operating rules to guide the specific practice of equity repurchase in market-oriented DES projects.In addition to the introduction and conclusion,this thesis is divided into four parts:The first part: The application of equity repurchase terms in market-oriented DES.Combining with the particularity of market-oriented DES projects to introduce the application of the equity repurchase terms.Analyzing different types of equity repurchase terms to reveal the logic evolution of equity buy-back and their impacts on market-oriented DES projects.The second part: The theoretical basis of equity repurchase terms in the market-oriented DES.Analyzing the rationality of using equity repurchase terms from the academic dimension: equity repurchase terms can alleviate the information asymmetry between the implementing agencies and enterprises,and have the function of dynamic valuation adjustment;Under the condition of incomplete contract,using equity repurchase terms could generate incentive function,which can promote enterprises to improve their operations;Through setting up equity repurchase terms can also give the implementing agencies the option to make advance arrangement for their equity withdrawal.Discussing the legal attribute of equity repurchase terms fromthe perspective of jurisprudence,and indicating that it is neither a guarantee clause nor a aleatory contract,but an anonymous contract with guarantee.The third part: The issues of equity repurchase terms in the market-oriented DES.The legal issues that may arise from the equity repurchase terms include three aspects:legal risk,right obstacle and performance dilemma.In addition,discussing the particularity of stage ownership and the legality of enterprises repurchase share.Equity repurchase terms reconstruct the distribution pattern of profit and risk of enterprise in the form of contract,but it also falls into the territory of capital control under the company law,and it is necessary to accept the examination of the principle of capital maintenance.As for judicial examination,there is still uncertainty about whether it can obtain the determination of equity repurchase term as valid.The fourth part: The countermeasures and suggestions to solve the legal issues of equity repurchase terms in market-oriented DES.Putting forward countermeasures from the perspective of the application of law: Allowing enterprises to make choices more freely between DES and debt replacement,applying the principle of capital maintenance more flexibly,improving the equity repurchase rules,designing the equity repurchase terms reasonably,and exploring the ways of heterogeneous shareholders to participate in corporate governance.