Efeect Research On Chongqing Iron&Steel Company’s Using Debt-to-Equity Swaps In Reorganization

Chinese economy has shown a form of highly indebted management in recent years.The enterprises rely on the massive bank loan to realize the business expansion.Chinese enterprises’ ratio of debt to GDP is rising,and the high leverage ratio increases the burden of enterprises’ debt expenditure.Affected by the great downward pressure of the economy,some enterprises have entered the period of industrial restructuring and transformation of shutting down backward production capacity.Due to the low speed growth of economy,and with great downward pressure of economy.Chinese enterprises continued to enter the industrial restructuring and transformation of eliminating backward production capacity period.When some enterprises face serious operational difficulties,their profitability will decline,and they may not be able to repay the bank’s loan and interests on time,which will increase the amount of non-performing loans of the bank,and the bank will face a certain risk of default.By searching a large number of documents,sorting out the company’s announcement disclosure data and analyzing the case’s background,implementation effect and influence,I draw a conclusion that the direct reason for the implementation of debt-to-equity swap is that the financial situation of the enterprise itself is not optimistic,and the debt-to-equity swap plan is the result of the joint consultation and resolution of different stakeholders.To promote the implementation of market-oriented debt-to-equity swap effectively and make full use of the resources’ practical value,I summarized some ideas.Finally I hope that the research of this paper can provide reference for the steel industry to solve heavy debt.