Research On CICC Gold's Debt-to-equity Swap Model And Implementation Effect

At present,China's economic development has entered a "new normal",the mode of economic development has also changed,and the quality of economic development has gradually improved.However,China's real economy debt problem is still relatively prominent,non-financial companies have high leverage ratios,and commercial banks' non-performing loans remain high,which severely restricts China's economic development.The market-oriented debt-to-equity swap is an important measure to reduce corporate debt and reduce corporate leverage in the context of China's supply-side reform to promote the improvement of business operations.As early as the late 1990 s,in order to help state-owned enterprises to reduce financial burdens and solve the problem of bad debts of the four major state-owned banks,China has implemented a round of policy debt-to-equity swaps.The new round of debt-to-equity swaps in 2016 adheres to the principles of marketization and legalization,and encourages social capital participation,which is significantly different from the first round of debt-to-equity swaps.Since the publication of the 2016 Opinions on Actively and Reliably Reducing Corporate Leverage and the Annex “Guiding Opinions on Debt-to-Equity Conversion of Market-oriented Banks” policy documents,many enterprises,especially large state-owned enterprises and state-owned enterprises,have actively seized policy opportunities to carry out debt-to-equity swap work and achieved good results.The implementation of market-oriented debt-to-equity swaps is complicated,involves multiple parties' interests,and involves significant risks.The choice of a transaction model is particularly important.Zhongjin Gold is the first company to adopt “the debt-to-equity swap + high-quality asset injection ” model,and has realized the innovation of the existing debt-to-equity swap model in the market and played a role model.This article takes Zhongjin Gold's debt-to-equity swap as a case study.First,it conducts a comparative analysis of the implementation of two rounds of debt-to-equity swaps in China,and summarizes the characteristics of market-oriented debt-to-equity swaps.Introduction and research,focusing on the analysis of the reasons for the implementation of debt-to-equity swaps,the innovations of debt-to-equity swaps,the reasons for the successful implementation of debt-to-equity swaps,and the effects of implementation.The study found that debt-to-equity swaps enabled Zhongjin Gold to reduce its asset-liability ratio.Successfully got rid of financial distress and helped improve the company's operating governance,but there are still some risks and deficiencies;finally,it draws research conclusions and puts forward the relevant aspects of China's debt-to-equity development from the choice of debt-to-equity model and the protection of shareholders' rights and interests.It is recommended to provide a reference for the subsequent implementation of debt-to-equity enterprises.