Research On The Implementation Effect Of Market-oriented Debt To Equity Swap In Private Enterprises

In the early 1990 s,in order to deal with the problem of non-performing assets of state-owned banks and financial burden of enterprises,China has put debt to equity swap into practice,effectively alleviating the crisis but leaving behind the internal debt problem of enterprises.In recent years,due to the good economic development situation and the continuous growth of the enterprise's asset scale,the following is the continuous improvement of the financial leverage of each enterprise,which leads to financial risks.In 2016,in the face of the situation that the enterprise's leverage ratio once again exceeds the normal range,as a means to reduce the enterprise's leverage ratio and financial risks,the concept of debt to equity has been put forward again.In the new situation of improving the economic system,this debt to equity swap is a market-oriented way to participate in the process of reducing the leverage of enterprises,emphasizing the voluntary participation of enterprises and financial institutions facing debt crisis,self financing their profits and losses,and vigorously guiding more private enterprises to join in.In the process of industrialization,the role of steel industry is self-evident.However,from the perspective of capital,high asset liability ratio is a typical feature of the steel industry.Combined with the guidance of national policies,many large-scale steel enterprises hope to reduce the asset liability ratio through market-oriented debt to equity swap,so as to achieve more long-term and healthy development.Therefore,this paper selects Nangang Co.,Ltd.,the first private iron and steel enterprise to carry out debt to equity swap,as the case study object.By analyzing the operation process and scheme design of debt to equity swap of Nangang Co.,Ltd.,and comprehensively evaluating its implementation effect,it studies the effectiveness of debt to equity swap,draws conclusions and puts forward some suggestions for the implementation of debt to equity swap of enterprises.It is hoped that the research of this paper can help the enterprises in financial difficulties The enterprise carries on the marketization debt to stock to provide the reference.The author arranged six parts for this paper,first part introduces the background and significance of the topic selection,and puts forward the innovation and shortcomings of this paper on the basis of sorting out domestic and foreign literature.In the part of theoretical analysis,firstly,it introduces the connotation of debt to equity,and then discusses its impact on corporate performance.The second chapter introduces the current situation of market-oriented debt to equity swap,and analyzes the situation of two times of debt to equity swap.The third chapter first explains the basic situation of market-oriented debt to equity swap and the reasons of case selection,then summarizes the basic situation of Nangang steel,analyzes its predicament and SWOT,and explains the specific operation process of debt to equity.The fourth chapter is the case analysis part.Firstly,it studies the short-term market reaction of debt to equity swap in Nanjing Iron and Steel Co.,Ltd.then it explores the long-term effect of debt to equity swap from the performance of various financial indicators and EVA model of the company.Finally,it is the conclusion and suggestions.Finally,this paper draws the following conclusions: first,reasonable design and application is the key to the implementation of debt to equity swap.Secondly,the debt to equity program implemented by Nanjing Iron and Steel Co.,Ltd.has achieved remarkable results,with good short-term market response,positive attitude of market investors,and improved economic added value and financial performance to varying degrees.At the same time,some suggestions are put forward for the conclusion: first,we should optimize the internal governance structure and attach importance to the follow-up management after the implementation of debt to equity swap;second,we should adhere to the "market-oriented principle" and expand the scope of participation;third,we should improve the access mechanism and exit mechanism;fourth,we should ensure clear legal support and improve the construction of the regulatory system.