Analysis Of The Market-oriented Debt-to-equity Conversion Model Of China's Non-ferrous Metal Companies

In recent years,China's economic growth has slowed down,and structural problems in economic development have gradually emerged.In order to improve the quality of economic development,China has put forward the main tasks of “capacity reduction,inventory reduction,deleveraging,cost reduction,and shortcomings”.Supply-side structural reforms.As one of the important measures for “de-leveraging”,the market-oriented debt-to-equity swap was officially launched on October 10,2016.Industries with high debt ratios,such as steel,coal mining and non-ferrous metals in China,have adopted market-based debt-to-equity swaps to resolve potential debt risks.During the implementation of market-oriented debt-to-equity swaps,China's relevant departments have successively issued a series of related policies,but the whole process of advancement has not been smooth,and there are generally problems of “signing more contracts and less landings”.The process of debt-to-equity swap is related to the relevant interests of various participating entities,and there are a variety of potential risks.The choice of debt-to-equity swap model determines whether the debt-to-equity trading process is smooth and whether it can maximize the protection of the interests of all parties.The smooth implementation of market-based debt-to-equity swaps is particularly critical.This article takes the tin fund's market-oriented debt-to-equity swap “establishment fund” model and the China Aluminum Corporation's market-oriented debt-to-equity swap“two-step” model as research objects,and analyzes China's nonferrous metal companies' market-based debt-to-equity swap model.First of all,this article introduces the development status of market-oriented debt-to-equity swaps in China's non-ferrous metal enterprises,and finds that the main reasons for the market-based debt-to-equity swap projects' implementation are “difficult to raise funds”,“difficult to exit equity”,and “debt-to-equity swap management”The five aspects of “difficult difficulty”,“low willingness to transfer stocks” and “largeproject risk”.Secondly,this article briefly introduces the current main market-based debt-to-equity swap model and the market-oriented debt-to-equity swap program of Tin Industrial and Aluminum Corporation of China,which will pave the way for subsequent analysis.Then,based on the main reasons for the current market-oriented debt-to-equity swap projects,the article focuses on the three important aspects of the fund-raising method,equity exit method,and corporate governance arrangements in the market-oriented debt-to-equity swap program of Tin and China Aluminum Analyze and focus on the interests of the participants in the debt-to-equity swap,so as to analyze and summarize the advantages and disadvantages of the two models.Finally,it is concluded that because the current market-oriented debt-to-equity swap projects have been implemented on a small scale,the most important reason is the “difficult exit of equity”,and the biggest feature of China Aluminum's “two-step” model is that it provides clear equity for investment institutions Withdrawing from the channel,the “two-step” model of Chalco is more suitable for promotion in the current debt-to-equity swap market.At the same time,this article also hopes to provide some reference and help for other enterprises to choose and design the model of debt-to-equity swap when implementing market-based debt-to-equity swap.