| In recent years,with China’s economy entering the "New Normal," the accelerated expansion of some enterprises has led to rapid growth in their debt levels,causing them to gradually fall into operational difficulties.On October 10,2016,the State Council issued the Guiding Opinions on Converting Creditor’s Rights to Equity in Marketed Banks,proposing that market-oriented debt to equity swaps should be an important means of "deleveraging" in the supply-side structural reform.Reducing the leverage ratio of enterprises has once again become the focus of attention.The existing research on corporate debt to equity swaps mainly focuses on the traditional policy-based debt to equity swap model,and there is insufficient research data on market-oriented debt to equity swaps in the new situation.Therefore,this thesis chooses AECC Aviation Power Co.,Ltd which uses "two-step" model as an analysis case to analyze the reasons and effects of market-oriented debt to equity swap.On the basis of literature review and relevant theories,the thesis introduces the process of the market-oriented debt to equity swap of AECC Aviation Power Co.,Ltd,and analyzes the motives of market-oriented debt to equity swap from three perspectives: policy factors,industry factors,and self factors.The thesis explores the effect of market-oriented debt to equity conversion from five aspects: market response,financial performance,enterprise value,financial risk,and non-financial impact.Among them,the event study is used to study the market response of AECC Aviation Power Co.,Ltd.By using the comparative research method,the vertical comparative analysis of the debt repayment,profitability,operation,and growth capabilities of the AECC Aviation Power Co.,Ltd before and after the debt to equity swap is combined with the horizontal comparative analysis of the industry average.Introduce the EVA evaluation model to compensate for the limitations of traditional financial indicators.Use the Z-score model to quantify the financial risks of market-oriented debt to equity swaps.The thesis explores the influence of the market-oriented debt to equity swap on the equity structure,corporate governance,and R&D investment of Aviation Power,taking into account its corporate characteristics.Research has found that there are three reasons for the marketization of debt to equity swap in aviation power.The first reason is the favorable promotion of "aviation power" and market-oriented debt to equity swap policies.The second is the demand for industry development and reducing leverage ratio.The third is to alleviate the shortage of funds and meet the needs of research and development investment.In terms of implementation effectiveness,first of all,the market responds positively to the market-oriented debt to equity swap of AECC Aviation Power Co.,Ltd.Secondly,the market-oriented debt to equity swap improves the profitability,debt repayment,and growth ability of the AECC Aviation Power Co.,Ltd,as well as increases the economic value added of the enterprise.However,the time frame is relatively short,and it has not fundamentally solved the operational problems of the enterprise.At the same time,the market-oriented debt to equity swap significantly reduces the financial risk of Aviation Engine in the short term.Finally,the debt to equity swap optimizes the equity structure of AECC Aviation Power Co.,Ltd,enhances external supervision of the enterprise,and promotes the output of technological achievements.However,its impact on corporate governance is relatively limited,and it also increases the risk of small and medium-sized shareholders’ earnings being amortized.The thesis proposes optimization recommendations from the perspectives of government,industry,and enterprises for the implementation effect of market-oriented debt to equity conversion of AECC Aviation Power Co.,Ltd,providing reference for companies that will carry out market-oriented debt to equity conversion in the future. |
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