Research On The Economic Effect Of Market-based Debt-to-equity Swap

In recent years,China's entered a new era of economic development.The high debt of enterprises and the high non-performing loans of banks have become two major problems that hinder economic development.In October 2016,the State Council issued the “Guiding Opinions on Converting Equity from Marketized Banks”,and the market-oriented debt-to-equity swap has become an important means to resolve financial risks and effectively reduce leverage.Different from the previous round of policy-based debt-to-equity swaps,this round of debt-to-equity swaps is based on the principle of marketization and legalization,and achieves marketization in the selection,pricing mechanism,fund raising,and equity exit of debt-to-equity swaps.The research object selected in this paper is Yunxi Group.As the first local state-owned enterprise to implement market-oriented debt-to-equity swap,its debt-to-equity swap scheme has certain innovation and demonstration.This paper analyzes the problems in the operation and finance of Yunxi Group,discusses the motives of implementing debt-to-equity swaps,analyzes the advantages and disadvantages of Yunxi Group's debt-to-equity swap model.From the perspective of studying the effect of market-oriented debt-to-equity swaps,and considering the challenges faced by Yunxi Group in the implementation process,the following conclusions are drawn: The operating mode of Yunxi Group's debt-to-equity swaps is in line with the principle of marketization,and there are many bright spots and advantages.Market-based debt-to-equity swaps help Yunxi Group improve its profitability and reduce leverage;promote Yunxi Group to abandon backward production capacity,increase innovation and research and development;diversify equity and optimize governance structure.However,Yunxi Group still has problems such as the effect of reducing leverage and the low output of R&D.At the same time,it faces the challenges of slow market-to-equity swap,and difficulties in exiting equity.By summarizing the achievements and challenges of the market-oriented debt-to-equity swap of Yunxi Group,combined with the company's strategic transformation objectives,this paper proposes to improve the financing methods of enterprises and optimize the capital structure;strengthen the cooperation between banks and enterprises,accelerate the transfer ofdebt-to-equity swaps;deepen comprehensive reforms and promote Some suggestions for enterprise transformation and upgrading,I hope to provide some reference for other market-oriented debt-to-equity companies.