Research On The Deleveraging Problem Of Central Construction Enterprises

In order to cope with the financial crisis in 2008,the financial stimulus plan represented by "4 trillion" has focused its funds on infrastructure fields such as railways,highways and water conservancy.The leverage ratio of large construction enterprises has rapidly increased.By the end of 2018,the leverage ratio of construction industry was 75.60%,ranking second among the 27 non-financial industries of CITIC,second only to real estate.Rising leverage ratio and financial fragility implied by high leverage,the central economic work conference at the end of 2015 clearly defined deleveraging as one of the important contents of supply-side structural reforms.Since 2016,the State Council,the National Development and Reform Commission and other departments have issued a number of policies to guide central enterprises to deleverage.Therefore,in the new normal of economic development,how to extricate central construction enterprises from the dilemma of high leverage and "travel light" can be said to be an important issue related to the future development of the entire construction industry.China Railway is taken as an example,on the basis of introducing the related background,research status and theory,firstly,the reasons for its high leverage ratio are analyzed based on internal and external factors.Secondly,the necessity of reducing leverage is analyzed.Then,it analyzes the implementation of revitalizing existing assets,increasing the scale of interests,innovating financing,reducing levels,and analyzes the effectiveness,including the changes of leverage ratio,comparison of methods and operating conditions.Through the above analysis,this paper finds that China Railway has achieved the effect of reducing leverage under the joint action of various ways,and through the comparison of various ways,it is found that the debt-to-equity swap is the most efficient and the short-term leverage reduction effect is remarkable,but there is the risk of diluting earnings per share and will have a negative impact on the secondary market.Improving profitability can meet the demands of de-leverage,high-quality development and secondary market at the same time,which is a long-term effective method.In addition,the reduction of corporate leverage and debt pressure have played a positive role in promoting the management of enterprises to a certain extent.However,there are some problems so this paper puts forward corresponding improvement suggestions,hoping to further promote China Railway to complete the task of reducing leverage,achieve quality improvement,and at the same time provide relevant experience for other enterprises to implement deleveraging.