Research On The Debt To Equity Swap Effect Of SD Private Listed Company

"Debt to equity swap",as its name implies,is to convert the creditor’s right into equity.Specifically for commercial banks to have their rights to the transfer of equity,through the third party implementation agency(such as the financial Asset Management Co)to its equity.In order to accomplish the reform task of "three go,one down,one fill",the State Council promulgated the guiding opinions on the transfer of the creditor’s rights of the market-oriented banks in October 10,2016.The debt to equity swap policy was introduced again after 17 years,emphasizing that the object of stock exchange should be market-oriented rather than designated by the government.This paper takes the first SD private company in 2016 as the research object,and makes research on the writing ideas of case introduction,case analysis and case enlightenment.As the largest private ship enterprise in China,SD has chosen debt to equity swap to save itself after four consecutive years of losses in 2016.SD company is strong in scale and advanced in technology,which meets the requirements of the state for debt to equity swap,and the bank and the government also give support to the debt to equity swap of SD company.This paper focuses on the effect of debt to equity swap in SD company.Debt to equity swap can play a role in reducing leverage,thereby improving debt paying ability and enhancing financing capacity,but it may also bring negative effects of loss of interest tax shield.Finally,the paper puts forward reasonable suggestions for the development of SD company after the debt to equity swap,such as the establishment of a common governance mechanism dominated by SD company,and the promotion of intelligent manufacturing,etc.,and draws some enlightenments for the future private enterprises to implement debt to equity swap.