Feasibility Study On Debt-to-Equity Swap Of Expressway Enterprise

With the gradual prosperity of China's national economy,the construction of expressway has been developing rapidly.However,due to the large investment in expressway construction and the slow return on investment,many expressway project companies are facing a heavy debt burden.The huge financial burden of debt occupies most of the expenses,and sometimes even exceeds operating income,making the net profit of project company negative.Because of this,the phenomenon that the project company cannot pay the project money according to the contract frequently occurs,which not only affects the normal operation of the project company itself,but also brings great difficulties to the production and operation activities of the project contractors at all levels downstream of the project company,and it is not conducive to the healthy development of the expressway industry in the long term.This paper innovatively applies the theory and method of debt-to-equity swap to expressway enterprises.The current study on debt-to-equity swaps focuses on policy debt-to-equity swaps between banks and state-owned enterprises,but there are few studies on commercial debt-to-equity swaps between companies.Therefore,this paper firstly discusses the feasibility of debt-to-equity swaps implementation among expressway enterprises.By expounding the research status and development history of debt-to-equity swaps at home and abroad,we found that China is trying to promote the implementation of commercial debt-to-equity swaps.On this basis,this paper study whether the commercial debt-to-equity swaps are in line with China's existing laws and regulations firstly,analyzes the legality and compliance from debt contribution and business administration of debt-to-equity enterprises;then it studies the willingness of the expressway enterprises to implement debt-to-equity swaps,and constructs a dynamic game model of incomplete information between expressway project companies and construction companies to solve the conditions for both parties to agree to convert debts to equity.In order to make the debt equity swap to meet the interests of both sides more reasonably,it is necessary to scientifically determine the proportion of the construction company's shareholding in the project company after the conversion.Thus,the equity valuation model of the Black-Scholes based on the Extreme Learning Machine(ELM)is introduced to evaluate the equity value of the project enterprise and Matlab software is used for training simulation,the shareholding ratio is determined based on the predicted equity value of the project company.Finally,this paper applies the model to analyze the actual case of the debt-to-equity swap of CL company and obtains the conditions for debt-to-equity swaps,which verifies the operability of the research results of this paper.