The Influence Of Debt-to-Equity Swaps To The Enterprise' Economic Benefit And Opinion

Debt-to-Equity swaps not only can reduce business leverage ratio,but also can defuse the risk of bad loans for banks with increasing of bad asset.The economy is at a critical moment of growth and change,so D-to-E swaps is an importance measure.The D-to-E swaps start again becoming a hotspot quickly on October 10,2016.For the first time practicing D-to-E swaps havs nearly 20 years sicne 1999.In the implementation of the early have got much wins,but with the development of time,a lot of state-owned businesses have return loss and some businesses even went to bankruptcy and clearning.Now D-to-E swaps start again,so how to avoid the problem during the first implementation is the most critical point,for example have much zombie businesses,the exit mechanism is not perfect,state-owned business form new repudiate debt mechanism and so on.The new marketization D-to-E swaps goals is mainly to reduce business leverage,not to resolve banking system risk.In the first round,state-owned businesses debt reduced,debt asset ratio reduced,finance charge reduced because there's no interest,businesses loss reduced.But the main reason for the heavy loss of state-owned businesses is the corporate internal governance and operation mechanism are not reasonable,is not because have too much liabilities.In this case,if business could catch the opportunity of D-to-E swaps and make equity structure varietiely and reset capital and increase the asset operation rate and avoid the difficulty of businesses finally,only in this way can the D-to-E swaps implement effectively.Firstly,This paper introuduces the development history and current situation of D-to-E swaps,made a comparison between the first D-to-E and the second D-to-E.After introduce The Haranqi Chemical company's business process and the specific implement plan of D-to-E,Through Dupont analysis method,it compared the change of Performance of Enterprise after D-to-E.Through research on the company status,it is concluded that The Haranqi Chemical company still be in loss because the prices of energy is regulated by the government and income is limited.At the same time,the risks still concentrated in the government because the AMC still holding company share and there is no effective exit from of equity.So this paper think it is need to determine right company,to match the police and the law,to perfect exit mechanism in the process of restating D-to-E.In the last of this paper,there is suggestions were put forward about The Haranqi Chemical company.To make the suggestion generality on the basis,there are suggestion about two subject of implementation include the company and the AMC.In order to have a better policy environment of restating D-to-E,there are suggestion about the government.