Research On The Motivation,operation Mode And Effect Of Market-oriented Debt-to-equity Swap In Steel Enterprises

As the country’s economy enters a new normal,there is a structural imbalance between supply and demand in the market,and at the same time,the country is accelerating its efforts to promote low carbon and energy efficiency in enterprises,putting forward the "double carbon" target for the first time.The steel industry,as the main supply side of China and the manufacturing sector with the largest carbon emissions,is vulnerable to the cyclical predicament of the industry,with serious overcapacity,rising leverage year by year and a daunting task to reduce emissions.Market-based debt-to-equity swap launched in 2016 can,on the one hand,effectively reduce the leverage ratio of enterprises in the short term.On the other hand,the "marketbased" feature also helps enterprises to introduce a diversified property rights structure and stimulate their transformation.However,there are still some problems in the development of market-based debt-to-equity swap for iron and steel enterprises,so it is important to analyse in depth the motivation,operation mode and effect of marketbased debt-to-equity swap.Based on the practice of market-based debt-to-equity swap of iron and steel enterprises,this thesis aims to broaden the theoretical research system of market-based debt-to-equity swap and help the implementation of supply-side structural reform of iron and steel enterprises through a combination of theoretical analysis and case studies.Firstly,the theoretical basis of the thesis is outlined by combing the relevant research literature on market-oriented debt-to-equity swap at home and abroad;secondly,the current situation of market-oriented debt-to-equity swap in the iron and steel industry is investigated,and the characteristics of the implementation of market-oriented debtto-equity swap in iron and steel enterprises are analysed in terms of implementation motives,operation mode,contracting scale and participating subjects,and it is found that there are difficulties in the selection of target enterprises,"explicit shares but actual debts " Finally,taking Valin Iron and Steel as a typical case,we analyze the motivation of its market-based debt-to-equity swap according to the company’s own situation and the industry,and evaluate the implementation effect of market-based debt-to-equity swap from three perspectives: market performance,financial performance and nonfinancial performance.The study found that: the motivations for market-based debt-to-equity swap of iron and steel enterprises include heavy debt burden,declining profitability,national policy promotion and low-carbon transformation;the operation mode can be divided into single operation mode and integrated operation mode;market-based debt-to-equity swap has a negative impact on the market performance of iron and steel enterprises in the short term;it has a certain degree of improvement on financial performance;and it has limited improvement on the governance efficiency of iron and steel enterprises.In response to the problems identified,the company further proposed feasible suggestions to reasonably select the target enterprises for market-based debt-to-equity swap,improve financing channels to reduce "explicit shares but actual debts",broaden the exit mechanism of market-based debt-to-equity swap,and establish a long-term mechanism of corporate governance after the swap,providing valuable experience for subsequent implementation of debt-to-equity swap of iron and steel enterprises.