An Analysis Of The Motivation And Performance Of Market-oriented Debt To Equity Swap In Private Enterprises

China's iron and steel industry is a typical industry with strong cyclical and heavy assets.It not only has obvious policy characteristics,but also is closely related to the economic cycle.Under the pressure of economic downturn in China,due to the popularization of large-scale production,iron and steel enterprises blindly expand the enterprise scale and increase product production,resulting in structural surplus in the industry.In October 2016,the state issued the guidance on debt to equity swap of market-oriented banks,officially promoting the implementation of market-oriented debt to equity swap.The purpose is to provide policy guidance and support for enterprises to reduce the risk of financial leverage and resolve overcapacity,so that enterprises can get rid of financial difficulties as soon as possible and improve the level of corporate governance.Compared with the first policy debt to equity swap,this market-oriented debt to equity swap has the characteristics of marketization and legalization.In terms of participation objects,it is no longer limited to the participation of state-owned enterprises,but allows private enterprises with demand and conditions to participate as much as possible.This market-oriented debt to equity swap can help private enterprises reduce financial risks and ensure the steady development of private economy.By the end of April 2019,106 enterprises have participated in the implementation of market-oriented debt to equity swap,with a total of 367 projects signed,with a total contract amount of 2.3 trillion yuan,and the specific investment amount has reached 909.5 billion yuan.Among them,24 market-oriented debt to equity swap have been implemented in private enterprises,but the proportion is less than 7%of the overall market.This paper selects the first successful private enterprise market-oriented debt to equity swap project-enterprise a as the research object,and analyzes the motivation and performance of enterprise A's market-oriented debt to equity swap project.In the research content,first of all,the paper compares the two rounds of debt to equity swap in China,and analyzes the motivation of a company in participating in the market-oriented debt to equity swap project.Secondly,it makes a comparative analysis on the performance of a company before and after participating in the market-oriented debt to equity swap and financial institutions.In terms of financial performance,after the implementation of market-oriented debt to equity swap project,the indicators of financial performance have been significantly improved,and the enterprise value has also been significantly increased.In terms of non-financial performance,the main credit of enterprises has also been improved.This time,the market-oriented debt to equity swap of enterprise a will reduce the debt pressure,optimize the capital structure and enhance the enterprise value.Finally,this paper summarizes the motivation and performance analysis results of a company's participation in market-oriented debt to equity swap,and puts forward relevant suggestions for private enterprises in the implementation of market-oriented debt to equity swap,hoping to provide reference for the research and practice of market-oriented debt to equity swap of private enterprises.