A Research On Risk Prevention Of Accounts Receivable Asset Securitization In China’s Iron And Steel Enterprises

The steel industry is China’s pillar industry.Its investment-pull ability and ability to absorb employment have made an indelible contribution to China’s economic development.However,in the process of development,it relied on capital injection to achieve production expansion and economies of scale.Over the years,it has formed an unreasonable debt structure and production mode,and the drawbacks of overcapacity gradually emerged.Steel company has a large capital investment and a long recycling cycle.It relies solely on bank loan financing,so the debt ratio has risen year after year.In the stage of high-quality economic development,due to the impact of the economic downturn,steel companies have also suffered from cash shortages and increased accounts receivable.How to actively and steadily de-leverage and de-capacity,revitalize existing assets,and increase liquidity are urgent problems for steel companies at this stage.As a new type of financing tool,asset securitization can play a certain role in helping enterprises revitalize existing assets,increase liquidity,and reduce debt ratio.Encouraged by relevant policies,companies have launched asset securitization projects.In 2017,corporate asset securitization became the largest financing tool on the market.In the same year,Premier Li mentioned in his government work report that market would promote the securitization of corporate assets.The description of asset securitization has changed from “exploration” to “promotion”,and functional positioning has also changed from “financing tools” to “de-leveraging tool”.In 2018,the report emphasized the transformation of old and new kinetic energy of economic development,implemented the restructuring of state-owned enterprises,and prevented financial risks.This reflects the central government’s emphasis on asset securitization,which also shows that asset securitization has good development opportunities.As a leading enterprise in the steel industry in Shandong Province,Jinan Iron and Steel Group has been affected by industry changes in recent years.The main business income decreased,the cost increased,and short-term debt repayment pressure increased.In 2015,Jinan Iron and Steel Group carried out asset securitization of its accounts receivable to Shandong Iron and Steel Jinan Branch.This paper analyzes the securitization of accounts receivable assets of Jinan Iron and Steel Co.Ltd.Firstly it sorts out the relevant documents of enterprise asset securitization,and then expounds the related theory and development history of asset securitization,analyzes the impact of asset securitization on enterprises.Then it introduces the transaction structure of the Jinan Iron and Steel Group No.1 Asset Securitization Plan,discusses the effects,risks and preventive measures of asset securitization.Finally,the article summarizes the problems existing in the process of enterprise asset securitization and puts forward policy recommendations.This article has some innovations and features.From the research perspective,the article takes Jinan Iron and Steel Group as an example to discuss the role of asset securitization in helping steel companies to introduce cash to increase liquidity in the context of de-capacity.From the point of view,the article puts forward that the meaning of de-leverage for enterprises is to reduce the asset-liability ratio,accelerate the turnover of funds,point out the de-levering effect of asset securitization and some problems at the current stage.The underlying assets are not scattered enough,no external upgrade agencies have been introduced,and real sales have not been made.In terms of policy recommendations,the article puts forward proposals with strong application value,including accelerating legislation and system construction,improving supervision and market system,and improving project design.This paper attempts to help the development of asset securitization in iron and steel enterprises.