The Application And Utility Analysis Of China Debt-to-Equity Swap In State-owned Listed Enterprises’ Restructuring

Under the background of high leverage of state-owned enterprises,some state-owned enterprises are facing the pressure of reorganization,and their own expansion or blind investment have brought high debt pressure to their operations.But at the same time,many state-owned enterprises hold important national strategic resources,or have irreplaceable positions in the industry.If the reorganization method of liquidation is adopted,it will be very uneconomical for the development of enterprises.This paper provides a reference for other state-owned listed companies with debt-to-equity reorganization plans by analyzing the application of debt-to-equity swaps in the bankruptcy and reorganization of Salt Lake Shares and its effects.The research of this paper finds that there are two conditions for enterprises to use debt-to-equity swap in their restructuring.First,the enterprise should meet the qualification requirements for debt-to-equity reorganization,the enterprise should be in an advantageous industry,and the high-quality assets of the enterprise can bring it the ability to continue operations.In addition,when an enterprise conducts a debt-to-equity swap,it should formulate a reasonable and feasible market-oriented implementation plan,which should be accepted by both creditors and shareholders.The restructuring of debt-to-equity swaps is applicable to state-owned enterprises,and can protect the safety of important state-owned assets and maintain strategic resource development and production.The positive effect that debt-to-equity reorganization bring to enterprises can be reflected in qualitative and quantitative aspects.Qualitatively,the debt-to-equity swap reorganization promoted the adjustment of the company’s strategy,improved the quality of the company,and escorted the company’s long-term operation.Quantitatively,the debt-to-equity swap reorganization has improved financial indicators,and has a practical impact on the company’s operations in terms of capital structure,solvency,profitability,and operational capabilities.As an important measure of the company’s value,this paper uses the event study method to prove that the reorganization news has a significant impact on the company’s stock price.The company’s value has had a substantial impact and promoted the improvement of the company’s value.