Chongqing Iron And Steel Bankruptcy Reorganization Case Study

In recent years,China’s steel industry demand is sluggish,overcapacity,many steel companies have fallen into a heavy debt crisis,and even went to the end of bankruptcy.With the continuous deepening of China’s sup ply-side reforms,the de-capacity structure has also become the direction of change in the steel industry.On the one hand,for the chaotic management of low competitiveness,the “zombie enterprise” that only relies on government subsidies to survive,should follow the market rules and clear it in time.On the other hand,if there is still surviving value,if the bankruptcy liquidation will seriously affect the interests of the society,it should actively change and restructure the debt crisis to improve op erations.As an important system of the modern economic system,the bankruptcy reorganization system is of great significance for optimizing the allocation of resources in the industry and promoting the healthy development of the economy.Chongqing Iron and Steel Bankruptcy Reorganization was the first “A+H” listed company in China to reorganize and introduced China’s first steel industry structure adjustment fund led by China’s Baowu Group as a restructuring party.It only took 6 months to resolve.Nearly 41.7 billion debts,and maintained the optimization of existing business,completed the first market reorganization of China’s steel,was rated as "particularly significant and without precedent",in order to explore the complex factors involving large listed companies and traditional industries The road to reform of state-owned enterprises has contributed to the success of the model.Based on the relevant theories about bankruptcy and reorganization at home and abroad and the current laws and regulations related to reorganization in China,this paper analyzes the process of Chongqing Iron and Steel from financial distress,selects the cause of bankruptcy reorganization,reorganization plan and reorganization performance results.The reasons for the successful bankruptcy reorganization of Chongqing Iron and Steel,and the corresponding recommendations from the enterprise level and the improvement of the government system.This paper believes that the key to the success of Chongqing’s steel restructuring is th e adherence to the principles of marketization and rule of law.By introducing industrial market-oriented funds and cooperating with the government court banks to effectively innovate the debt-to-equity swap model,the company succeeded in removing difficu lties and resolving it.Operating crisis.For enterprises to successfully get out of trouble through bankruptcy and reorganization,they should choose the appropriate reorganization mode according to their own situation,follow the law of marketization,and pay attention to the protection of the interests of creditors.For the government,it should shoulder its due responsibilities,not only to strengthen the review of re-qualification,but also to appropriately intervene in the enterprises that have entered the reorganization,and coordinate the multi-party forces to coordinate conflicts of interest to alleviate the obstacles to the reorganization of enterprises.Continuously improve the reorganization of information disclosure system to strengthen the supervision of the process and promote a more healthy and orderly development of the market.