Analysis Of The Reasons For The Success Or Failure Of Debt Restructuring Of Listed Companies And Its Economic Consequences

With the increasingly complex economic situation,market conditions are changing,and the business risks faced by enterprises are increasing.Public entities often suffer from a shortage of cash flow and difficulty in paying off their debts due to some external factors as well as the poor management.In this case,debt restructuring may be more in line with the interests of both the creditor and the debtor than directly insolvency liquidation.This article also focuses on the process of the debt restructuring as well as the economic impact on the public companies.Through debt restructuring,enterprises can avoid the fate of delisting or even bankruptcy by alleviating the short-term debt repayment pressure,getting the business back on track,and turning a profit.Thus,debt restructuring will be a good choice when company is suffering an insolvency risk.To discuss the favorable factors and the economic consequences of debt restructuring from various aspects,this paper takes the Kaiser Group as a study case for analysis and aim at provide effective suggestions for public companies and help them avoid financial difficulty by running the process of debt restructuring smoothly.This paper takes case analysis as the research method and selects the research on debt restructuring of Kaisa Group,a real estate public company.Firstly,this paper analyzes the reasons why Kaisa has fallen into financial difficulty.Secondly,we analyze the problems and conflict of interest among various stakeholders during the process of debt reorganization,and summarize the key factors for the success of debt restructuring through the Kaisa's past debt restructuring experiences for three times.Finally,by analyzing the changes in financial performance and business performance of Kaisa Group after debt restructuring,the economic consequences of debt restructuring can be obtained.Through the study of the case,this paper summarize the following key factors for the success of the debt restructuring of listed companies: the conditions of debt restructuring that all stakeholders can accept,the huge losses that the creditors will suffer after the bankruptcy and liquidation,as swell as the internal factors of the enterprise itself.Debt restructuring can bring good economic consequences to enterprises in financial difficulty.Thus,we can draw a conclusion that through debt restructuring,enterprises have eased the pressure on cash expenditures and slowly back to the normal operations,which has improved financial performance and business performance.Therefore,this paper provide following suggestions for enterprises: 1)real estate companies should reduce leverage and actively guard against high insolvency risks;2)companies should have sufficient cash reserves to cope with debt defaults that may result from unexpected events;3)properly handle political and business relations,not Cross the red line of the law;4)fully consider the interests of the creditors and make restructuring in positive ways.