Case Study On Debt-to-Equity Swap Model Of Social Capital Fund Raised By YunXi Group

At present,the situation of China’s market economy is not optimistic.The overall economic environment is sluggish,the market demand is insufficient,the problem of overcapacity is serious,and the corporate leverage ratio remains high.In order to solve these problems,reduce the leverage ratio of enterprises and comply with the supply-side reform,the state council put forward the market-oriented debt-to-equity swap program on October 10,2016,published the market-oriented debt-to-equity swap guidelines,and clarified the ways and principles in the implementation process of market-oriented debt-to-equity swap.Since then,China’s market-oriented debt-to-equity swap has been officially implemented.On the one hand,market-oriented debt-to-equity swap can effectively reduce the leverage ratio of state-owned enterprises and help enterprises with temporary operational difficulties but good market prospects to alleviate the pressure of debt.On the other hand,it can help commercial banks reduce the non-performing loan ratio and reduce potential risks.This thesis takes the debt-to-equity swap case of social capital fund raised by YunXi group as the research object.Firstly,the definition of debt-for-equity and fund,the classification of debt-for-equity model,the principal-agent theory,capital structure theory and other related theories are expounded.Secondly,it introduces the general situation of the basic case of debt to equity swap of YunXi group,the company’s operation and financial situation before debt to equity swap,the specific implementation process of debt to equity swap,and the company’s operation and financial situation after debt to equity swap.After that,the thesis makes a detailed analysis on the debt-for-equity swap of YunXi group from multiple perspectives,mainly from the overall model of debt-for-equity swap of social capital fund raised by YunXi group,and analyzes its mode selection basis,implementation conditions and implementation purposes.This thesis analyzes the characteristics of the model,the characteristics of the fund construction and the characteristics of the withdrawal mechanism.In addition,the thesis analyzes the effects of debt-for-equity swap on the three parties of fund construction: for the effect of GP-YunXi group,the debt-to-equity swap makes the capital structure of YunXi group adjusted,the solvency improved,the profitability improved,the development strategy adjusted,and the transformation and upgrading realized.For the effect of GP-CCB,the debt-for-equity swap reduces the potential non-performing loan ratio of CCB,and the cross-shareholding swap makes CCB avoid moral hazard,strengthens the role of CCB as an investment bank,and improves CCB’s comprehensive operation capability.For the effect of LP-social capital,debt-for-equity swap can broaden the investment channels of social capital and improve the utilization rate of social capital.This thesis studies the debt-for-equity swap case of social capital fund raised by YunXi group,which is helpful for similar enterprises to use this model for reference to relieve financial pressure,for state-owned banks to reduce credit risk through debt-for-equity swap,and for social idle funds to obtain benefits through debt-for-equity swap.