| Affected by the macroeconomic environment,the steel industry has overcapacity problems,the company’s debt scale continues to increase,and the leverage ratio continues to rise.Many steel companies are in a difficult situation.It is difficult to maintain the normal development of the company by itself.It is imperative for the steel industry to revive operations through deleveraging to strengthen the company’s own hematopoietic capabilities.In 2016,the State Council’s related policies on market-oriented debt-to-equity swaps kicked off a new round of market-oriented debt-to-equity swaps.At the time,Chongqing Iron and Steel was facing a restructuring crisis.Under this opportunity,the company adopted a market-oriented debt-forequity swap for reorganization and successfully got rid of the predicament.Therefore,this article takes Chongqing Iron and Steel as the research object to study its market-oriented debtto-equity swaps under bankruptcy and reorganization,and provides a reference for companies planning to implement market-oriented debt-to-equity swaps to get rid of their difficulties.This article uses the literature research method to sort out previous studies on marketoriented debt-to-equity swaps.Based on the agency cost theory,trade-off theory,and incomplete contract theory,the case analysis method is used to introduce the basic overview of Chongqing Iron and Steel and its market-oriented debt-to-equity implementation plan,and to analyze the motivation for its market-oriented debt-to-equity implementation.The comparative analysis method is used to select the financial data of Chongqing Iron and Steel for five years before and after the implementation of the debt-to-equity swap to compare and analyze its debt capacity,operating capacity,and profitability.The results of the research on Chongqing Steel’s market-oriented debt-to-equity swaps are obtained through analysis: market-oriented debt-toequity swaps help Chongqing Steel get rid of the risk of delisting and improve the operating conditions of enterprises;market-oriented debt-to-equity swaps can effectively reduce the company’s asset-liability ratio It will help the company’s solvency,operating ability and profitability to improve,and help the company get out of the predicament;market-oriented debt-to-equity swaps can increase the company’s economic added value;market-oriented debt-to-equity swaps can improve the company’s equity Structure,optimize corporate governance,and promote the establishment of a modern governance system;market-oriented debt-to-equity swaps can increase share prices;market-oriented debt-to-equity swaps can promote local economic development and maintain social stability to a certain extent.The conclusion of this paper is that the implementation of market-oriented debt-to-equity swaps is affected by various factors,and that the company,creditors and society can achieve a win-win situation through debt-to-equity swaps.Based on the above conclusions,Chongqing Steel’s market-oriented debt-to-equity swap can provide a reference for other enterprises that intend to implement debt-to-equity swaps to get out of the dilemma:(1)Enterprises should actively explore and choose the appropriate method to get out of the dilemma.(2)Industry adjustment funds can be introduced,and professionals and institutions can be introduced to participate in business operations.(3)Debtto-equity swaps are a multi-party game process.The design of the conversion plan must take into account the interests of shareholders,creditors,and employees to achieve a win-win situation and improve the efficiency of the conversion.(4)Debt-to-equity swaps should be combined with their own circumstances to find their own problems and achieve a complete turnaround.The innovation of this article is to select the evaluation of the financial effects of marketoriented debt-to-equity swaps,and to evaluate the effects of market-oriented debt-to-equity swaps from the cancellation of delisting risk warnings. |
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