Research On The Motivation And Performance Of Zhongjin Gold Market-oriented Debt-for-equity Swap Under Deleveraging Policy

After 2012,China’s economy entered a difficult period of "three phases superimposed".The macroeconomic downturn,the GDP growth continued to slow down,and Many problems such as high debt,inefficient operation and debt default were exposed in Chinese enterprises.In the face of supply-side contradiction and structural imbalance in China’s economic development,China started to promote supply-side structural reform with "three deleveraging,one reduction and one complement" as an important starting point in 2015.As one of the five tasks,"deleveraging" is committed to helping enterprises get out of the debt crisis and preventing the occurrence of systemic financial risks.In this context,The State Council resumed debt-for-equity swaps as a deleveraging tool in 2016 and actively yet steadily promoted market-based and law-based debt-for-equity swaps to help enterprises get out of financial difficulties and strengthen the vitality of sustainable economic development.At the same time,although the overall prosperity of the non-ferrous metal industry,one of China’s important pillar industries,has improved,the gold and copper industries have been affected by economic recovery,monetary policy changes,geopolitical and other uncertain factors,the price continues to shock,coupled with the introduction of resource tax,mine exit from the ecological zone and other policies,industry output and profitability have declined.As the only state subsidiary gold industry Zhongjin Gold is faced with a heavy debt burden development under siege,need take action out of the woods.With the promulgation of various supportive policies on market-oriented debt-equity swaps,zhongjin Gold decided to implement an innovative significance of the "three steps" market-oriented debt-equity swaps scheme,which will raise funds and the introduction of high-quality assets and debts into shares,the combination of comprehensive improve enterprise management condition and core competitiveness.Therefore,based on the supply side of the reform in China,one of the five main tasks "deleveraging" policy as the background,the author choose zhongjin Gold as the research object,focusing on the marketization of its debt convertible nested high quality assets into the comprehensive optimization scheme,focusing on the capital market the first innovative bonds convertible the motivation and performance impact study.While enriching the theoretical research on market-oriented debt-to-equity swaps in China,it also opens up ideas for other debt-to-equity swaps in financial difficulties.Firstly,the research method and theoretical basis of this thesis are determined by referring to relevant literature at home and abroad.Secondly,the case background,participants and implementation plan of the debt-equity swap of Zhongjin Gold are summarized,and the characteristics of marketization,law-based and diversification in the debt-equity swap plan are highlighted.Then,from the internal and external perspectives,combined with the policy industry environment and its own financial situation and other factors,in-depth analysis of the motivation of Zhongjin Gold to implement debt-equity swap.Then,based on the literature on the impact path of the debt-to-equity swap,the performance of the debt-to-equity swap was studied.The CAR value of the event study method was used to analyze that the market and investors were optimistic about the debt-to-equity swap in short term,and the reaction was positive.Based on MM theory and trade-off theory,this thesis analyzes the changing trend of financial indicators and economic added value before and after the debt-to-equity swap,which reflects that the market-oriented debt-to-equity swap not only reduces the debt pressure and financial risk of Zhongjin Gold,but also improves the level of profitability and corporate value.According to the agency theory,it explains the influence of market-oriented debt-equity swaps on non-financial performance of companies,and improves their governance efficiency,incentive mechanism and performance of social responsibilities while helping them achieve diversification of ownership structure and rationalization of resource allocation.Finally,through the full text of zhongjin Gold market debt comb of the case of Suggestions can be optimized in the process of implementation,and other similar companies can draw lessons from the enlightenment.