Research On The Implementation Performance Of The Market-oriented Debt-to-equity Swap

The current new round of debt-to-equity swaps is rapidly advancing in China’s economic life.Affected by the downturn of the macro economy,in recent years,the leverage ratio of Chinese enterprises has continued to rise,and the debt burden has increased.Some enterprises have even faced the risk of debt repayment or debt defaults.In order to improve the operating conditions of enterprises with good development prospects but temporary difficulties,we will better implement the decision-making and deployment of the five major tasks of "three go,one drop,one supplement".In September 2016,the State Council issued relevant guidance on debt-to-equity swaps,which means a new round of debt-to-equity swap was officially launched.Compared with the previous round of debt-to-equity swaps,the current round of debt-to-equity swaps has been carried out on the principles of marketization and legalization,and has undergone major changes in terms of the purpose of implementation,the subject,the implementing agency,the underlying creditor’s rights,and the source of funds.The purpose of this round of debt-to-equity swaps is to reduce corporate leverage and promote supply-side structural reforms;The main body of implementation is not limited to state-owned enterprises,and can be determined by the relevant entities through independent negotiation;Allow the implementing agency to use market-based methods and channels to raise debt-to-equity funds and guide social funds to participate in social reforms.After the "Opinions" were issued,China’s market-oriented debt-to-equity swaps have made good progress.However,this round of market-oriented debt-to-equity swaps is facing the dilemma of intentional signing and few actual landing projects.Under the circumstances,most of the domestic scholars’ research has rarely started from the perspective of implementation effects,and combined with successful market-oriented debt-to-equity cases for performance analysis.Therefore,this article takes the successful case of debt-to-equity swap of China Shipbuilding Industry Co.,Ltd as the research object,and starts with the introduction and analysis of market-oriented debt-to-equity swaps,and then puts forward implementation performance and suggestions to solve the problems of the new round of market-oriented debt-to-equity,in order to provide reference to the state-owned enterprises.This article is divided into six chapters.The first chapter is the introduction.The background and significance of the research,a review of domestic and foreign literature,research ideas and methods,and the innovations and limitations of this article are introduced.The second chapter is related concepts and theoretical basis.An overview of debt-to-equity swaps,a comparative analysis of the two rounds of debt-to-equity swaps,performance evaluation methods of debt-to-equity swaps,and the theoretical basis of debt-to-equity swaps are introduced,laying a theoretical foundation for the analysis of China Shipbuilding Industry debt-to-equity swaps.The third chapter is the case analysis.Taking the project of China Shipbuilding Industry debt-to-equity swap as a case,the background of China Shipbuilding Industry ’market-oriented debt-to-equity swap is first introduced,and then the motivation of China Shipbuilding Industry ’s market-oriented debt-to-equity swap and the scheme of China Shipbuilding Industry ’s market-oriented debt-to-equity swap are analyzed.The fourth chapter,the implementation performance analysis part of China Shipbuilding Industry’s market-oriented debt-to-equity swap,are analyzed from the perspectives of financial performance,market performance and business operation.In terms of financial performance,the accounting index analysis method was used to analyze China Shipbuilding Industry’s operational capacity,solvency,profitability,growth capacity,and EVA indicators before and after the debt-to-equity swap.In terms of market performance,the event research method is used to analyze the capital market response of China Shipbuilding Industry before and after the debt-to-equity swap.In terms of corporate operations,the analysis is carried out from the perspective of diversified equity structure,improving corporate operating efficiency,and promoting business transformation and upgrading.In terms of problem analysis,it mainly analyzes from the perspectives of internal governance and shareholders’ rights.Chapter Five,the suggestions and references drawn from the debt-to-equity swap case,points out the places in the China Shipbuilding Industry debt-to-equity swap plan that are worthy of reference for subsequent debt-to-equity swap companies,and discusses the existing problems with China Shipbuilding Industry,the implementing entities,and regulators propose.Chapter VI summarizes the full text.The conclusion of this article is that through the implementation of the debt-to-equity program,China Shipbuilding Industry can help improve China’s financial structure and diversify its equity structure in the short term,and improve the efficiency of business operations and promote business transformation and upgrading in the long term.The problem is that the company’s internal governance mechanism is not perfect enough and could not fully protect the shareholders’ rights of the implementation agency.The recommendations of the thesis are: 1.Enterprises after debt-to-equity swaps need to improve the incentive mechanism of relevant management and key employees;2.To protect the shareholders’ rights of debt-to-equity implementation agencies;3.The debt-to-equity implementation agencies must strengthen post-investment management and supervision.At the same time,the government should formulate relevant support policies,such as granting certain preferential tax policies to the enterprises;fostering a more complete capital market and intermediary institutions,and providing a good exit channel for debt-to-equity swaps.