Research On Market-oriented Debt-to-equity Model Of CSIC

Since October 2016,China has issued a series of market-oriented debt-to-equity swap policies,aiming to promote state-owned enterprises to reduce their leverage through market-oriented debt-to-equity swap.However,the whole process is not smooth,and the phenomenon of"difficulty in landing"is common.There are many risks in the implementation of the market-oriented debt-to-equity swap,involving multiple interest demands.The choice of transaction mode enables all parties to reach a balance in the game,which is particularly crucial for the smooth implementation of the market-oriented debt-to-equity swap.At present,there are a few central enterprises in the market,such as China heavy industry corporation,China aluminum corporation of China,China railway group and so on.By introducing institutional investors to increase capital for subsidiaries and listed companies to purchase assets by issuing additional shares,China heavy industry corporation has implemented market-oriented debt-to-equity swap,and China heavy industry is the first enterprise to implement market-oriented debt-to-equity swap in this mode.Existing studies on debt-for-equity swaps have analyzed the types of debt-for-equity swaps,the causes of debt-for-equity swaps and the operating mechanism of debt-for-equity swaps.However,there is a lack of systematic research on the internal logic of debt-for-equity swaps from the perspective of value.Based on this,this article in the marketization of China's heavy debt convertible,for example,research on the marketization of its debt convertible model,analysis the business process of the pattern of marketization of China's heavy debt,intrinsic value logic,advantages and disadvantages,and put forward the optimization Suggestions for improvement,to provide path reference for other state-owned enterprises,as well as debt theory of the pattern of complementary.This paper,based on valuation theory and decision-making theory,combined with the case of China heavy industry's market-oriented debt-to-equity swap,analyzed the debt-to-equity swap model from the aspects of business process,value logic,implementation effect,advantages and disadvantages,and put forward Suggestions for optimization and improvement of the model.Through research,the conclusion is drawn:(1)the intrinsic value logic of China heavy industry's market-oriented debt-to-equity model is that institutional investors buy the equity of listed companies with monetary funds.(2)in China heavy industry's market-oriented debt-to-equity model,institutional investors bear the risks that should be borne by financial institutions.(3)the key to the successful implementation of the market-oriented debt-to-equity swap model of China heavy industry is that,at the beginning of the implementation of market-oriented debt-to-equity swap,institutional investors accept the price range locked by listed companies and are willing to bear the risk of stock price fluctuation of listed companies.(4)although China heavy industry has successfully implemented the debt-to-equity swap in the two-step model,institutional investors bear the risk of stock price fluctuation in the secondary market.Therefore,Suggestions are as follows:(1)after becoming shareholders,investors should actively participate in corporate governance and improve the governance level of the company;Investors can use risk hedging tools to reduce capital market risk.(2)for enterprises that convert to stocks,in order to increase the enthusiasm of social capital to participate in the market-oriented debt-to-equity swap,it is better to combine the market-oriented debt-to-equity swap with the reform of mixed ownership and employee stock ownership,and improve the corporate governance system and operation mechanism after the completion of the debt-to-equity swap.In the future,soes need to inject high-quality assets to improve enterprise value,reduce investment risks of institutional investors and achieve win-win results.