A Case Study On The Implementation Mode Of Debt-to-Stock Swap Under The New Situation

In our country,the debt-to-equity conversion refers to the commercial bank selling the outstanding debt of the enterprise to the state-owned financial asset management company in a discounted manner,and the financial asset management company converts the debt acquired into the holding of the enterprise.Under the background of "high production capacity,high inventory,and high leverage",China began to implement a new round of market-based debt-to-equity swaps in 2016,and the new round of debt-to-stock swaps expanded the scope of participating enterprises,fully played the decisive role of the market,and helped enterprises deleverage.Strengthen the management efficiency of the enterprise,improve the corporate governance structure,and reduce the potential economic risk.Different from the previous round of policy-oriented debt-to-equity conversion,this round of debt-to-equity conversion is strictly in accordance with the principle of market economy,that is,market-based debt-to-stock conversion.The market-oriented debt-to-equity conversion is mainly suitable for high-quality enterprises that encounter temporary difficulties but have great potential for development,reduce the leverage ratio of high-quality enterprises,and accelerate the disposal of non-performing assets of banks at the same time.With the promotion of market-oriented debt-to-equity conversion,there have been many innovations in the implementation of debt-to-stock conversion.The research on debt-to-stock conversion mode is of great practical significance to the study of the market-oriented debt-to-stock conversion operation of enterprises.Hua Rong energy market-oriented debt-to-equity conversion is the first case since the market-oriented debt-equity conversion in China,and it is also a typical model of debt-to-stock conversion.As the first local state-owned enterprise with local AMC and city commercial bank involved in the implementation of debt-to-equity conversion,Shaanxi coal-turned debt-to-equity conversion adopted the fund model,which also provided a reference and reference for subsequent debt-to-equity conversion enterprises.This paper summarizes the current research situation and relevant theories of debt-to-equity conversion,on the basis of which,it makes a systematic analysis of the debt-to-equity conversion of Hua Rong Energy and Shaanxi Coal-to-Stock Company,and analyzes the business operation,financial situation,motivation and concrete modeof implementing debt-to-equity conversion.The two models are compared and analyzed.Fund model because of financing convenience,risk classification has become the mainstream operating mode in the current market.This model is suitable for good day-to-day operations,temporary difficulties encountered by high-quality enterprises.The stock repaying mode is more suitable for listed companies to avoid the phenomenon of real debt,but it may result in the decentralization of the control of the enterprise,which is not conducive to enterprise management,and it is difficult for both parties to determine the shares.When the price is agreed,it is difficult to implement it on the ground.Finally,through the comparative analysis of two kinds of debt-to-equity conversion schemes,it is found that the new round of market-based debt-to-equity swap is not a once-and-for-all,and enterprises should continue to look for ways to get out of the haze,and debt-to-equity conversion is just an auxiliary device to wipe out the thorns of enterprise development.It cannot be simply used as a means of debt cancellation,let alone all hopes of corporate development in debt-to-equity swaps.Only by strengthening the rationality of its own structure,improving its management level and operating efficiency,can the enterprise complete its transformation.At the same time,the state should perfect the relevant laws and policies to support the implementation of debt-to-equity conversion,ensure the efficiency of debt-to-equity conversion,and encourage creditor banks and enforcement machines.Construction of regulatory enterprises,give full play to the role of the market,complete China's supply-side reform.