The Research Of Dealing With Zombie Enterprises By Using Debt Reorganization

At present,due to the deep impact of the global economic crisis,the growth of international demand has slowed down and the domestic market has also performed poorly.Due to many factors such as the development stage,development concepts,and institutional mechanisms,China has experienced a severe overcapacity situation.One of the manifestations is the large number of “zombie enterprises”.Enterprises,originally for the purpose of making profits,are self-owned and self-financing economic organizations,but "zombie companies" are different.Although the form of the enterprise still exists,it cannot produce economic benefits.It is dependent on government subsidies and "blood transfusions" of bank loans,which drastically reduces the efficiency of resource allocation and operation.In order to comprehensively deepen reforms in China,it is necessary to realize the orderly exit of“zombie enterprises”.How to effectively deal with “zombie enterprises” and minimize adverse impacts has caused heated debates in various sectors of the society.The “zombie enterprises” have also resorted to litigation.At present,the "zombie enterprises" clearing means mainly include out-of-court debt reorganization and bankruptcy liquidation.This article takes the case of Group A as an example and conducts in-depth research on how to use the debt reorganization tool to compare and analyze the financial data of the two subsidiaries in 2015 and 2016 and summarize their working experience.A comparison was made with the traditionally used means of retiring a zombie enterprise,bankruptcy withdrawing,and comparing the respective advantages and disadvantages of the two methods.The last part of the article summarizes the inspiration gained from this case.Starting from the case of Group A,it makes recommendations on how other companies choose to exit the market for "zombie enterprises." On the basis of the overall company's overall strength and financial status,the company has put forward feasible policy recommendations for companies that can use debt restructuring to retired the “ zombie enterprises” and provide reference for related work.