A Case Study On The Implementation Of Debt-equity Swap By Huayou Cobalt

In the context of the 10-year economic crisis and the recovery of global trade in2018,General Secretary Xi Jinping proposed that China is in an important period of strategic opportunities for economic development,and the new normal should be used to define the characteristics of the current stage of economic development.China will adopt a more proactive fiscal policy to solve the financial difficulties faced by traditional industries such as steel,coal,real estate and non-ferrous metals,such as high asset-liability ratio and low turnover rate of accounts receivable.On October 10,2016 of the state council published "state council on actively yet prudently to reduce enterprise’s opinions on leverage and attached on the marketization of bank debt convertible guidance" to 1990 debt-for-equity policy went on stage again,a move that won the ministry of finance,tax bureau and other government departments,enterprises,Banks and asset management institutions of positive response.Into shares in the debt of the policy of relevant measures put forward in the 90 s debts into shares on the basis of the sublimation and change,and put forward the should follow the market,legal principle,emphasize the debt-to-equity swap model,choice of enterprises,the participating organization shall be fixed by the market independent consultation,intended to reduce the downward cycle in the economic development in the industry,the temporary economic difficulties,but it has good prospects for development of enterprise burden,and help them pull through and complete the industrial upgrading as soon as possible.In this paper,case analysis method,data research method and literature research method are used to study in detail the first private enterprise in Zhejiang province--the debt-to-equity swap implemented by HUAYOU cobalt industry.This paper firstly introduces the concepts and characteristics of the market-oriented debt-to-equity swap and the theoretical basis involved,and then introduces the specific scheme and background of the implementation of HUAYOU cobalt industry.As companies expand rapidly,the demand for capital increase and equity loan-to-value ratio is high,the industry on a downward cycle,asset management agencies booster,HUAYOU cobalt industry to implement the marketization of debts into shares,the article chooses to HUAYOU cobalt industry of "two-step" model analyzed the advantage and HUAYOU cobalt industry after the implementation of debt turn analyses the impact of the company,according to the implementation of HUAYOU cobalt industry analyses of debt-for-equity is summarized,the relevant inspiration is obtained.HUAYOU cobalt industry to implement the debt convertible will be great help for the enterprise,can help enterprises reduce the repayment pressure,reduce financial risk,improve profitability,solve the problem of equity pledge,also can improve the enterprise in the industry’s ability to resist risk downward cycle,to help enterprises solve the temporary financial difficulties and seek better development.The successful completion of the market-oriented debt-to-equity swap has set a good example for private enterprises to participate in the market-oriented debt-to-equity swap,expanded the scope of market-oriented debt-to-equity swap research,provided cases,and provided some good experience for other enterprises implementing debt-to-equity swap.