The Methods And Economic Effects Of State-owned Enterprises' Bankruptcy Reorganization

As China's economic development has entered a new normal,the economic growth rate has begun to slow down.Some industries have experienced severe excess production capacity,and the number of operating losses,insolvency,and bankruptcies has rapidly increased.Most of these enterprises are state-owned enterprises.The bankruptcy and reorganization of state-owned enterprises has always been pinned on the government's "bailout" solution.From the perspective of market effects,We cannot fundamentally solve the financial distress of state-owned enterprises.So at the 2015 Central Economic Work Conference,General Secretary Xi Jinping proposed to “strengthen efforts to strengthen supply-side structural reforms” and proposed to use market-based means to promote the bankruptcy and reorganization of state-owned enterprises.Saintymarine have completed bankruptcy and reorganization in December 2016.As a case in which state-owned enterprises attempted to use market-based means for reorganization,it was typical and timely.This article sorts out the reorganization methods of Saintymarine from the aspects of governance reorganization,strategy and operation reorganization,asset reorganization and financial reorganization,and then summarizes its marketization characteristics.Afterwards,we evaluates its economic effects from the perspectives of reorganization costs,economic performance,and benefits to stakeholders.The research found that Saintymarine's series of marketization means including the use of industrial transformation,employ professional managers,replace asset by fair value,and imply market-based debt-to-equity swaps successfully complete the bankruptcy reorganization and achieve good economic results.Compared with the bankruptcy restructuring led by the government,although the reorganization costs rise,the corporate performance has been improved,and the interests of most stakeholders have been better protected during the reorganization.Finally,this article summarizes the successful experience of the case,and proposes to improve the market withdrawal mechanism after debt-to-equity swaps,standardize the market pricing mechanism during reorganization,and properly handle the resettlement issues of employees.In order to exerting the role of market mechanism in bankruptcy and reorganization of State-owned Enterprises.