The Implementation Plan And Effect Of ZHONGJIN Gold's Market-Oriented Debt-to-Equity Swap

As an important financial tool,market-oriented debt-to-equity swaps can not only reduce corporate leverage and debt scale,but also improve corporate capital structure and corporate governance.Since my country's economy entered a new normal in 2014,problems such as overcapacity,high leverage,and debt default of non-financial enterprises have gradually emerged.As an important pillar industry in my country,the non-ferrous metal industry has overcapacity of low-end products,the total profit of the industry has fallen sharply,and problems such as long-term high leverage and high financial risks have gradually exposed,and the demand for deleveraging is urgent.As a leading company in the industry,ZHONGJIN Gold is also facing difficulties in its operation and development and is in urgent need of improving its financial performance.In order to solve the difficulties,the company decided to implement an innovative market-oriented debt-to-equity swap based on the "two-step" model of debt-to-equity swap,which is of reference significance.Therefore,based on the background of the country's deleveraging,this article studies the market-based debt-to-equity swap implementation plan of a specific company,examines its implementation effect,and evaluates its implementation plan accordingly and makes recommendations.This article takes ZHONGJIN Gold as the research object,and studies its characteristic schemes and effects of debt-to-equity swaps through event research methods and comparative analysis methods.Based on this,it summarizes experience,finds shortcomings,and puts forward suggestions for improvement.First,this article summarizes and summarizes the relevant literature on debt-to-equity swaps,and defines and outlines the relevant concepts of market-oriented debt-to-equity swaps and the theoretical basis used in this article;secondly,this article introduces the operating and financial conditions of ZHONGJIN Gold And analysis,sorted out the three-stage basic implementation plan of the company's debt-to-equity swap and the specific implementation process of the plan;then,this paper defines the implementation effect theoretically,focusing on the three phases before,during and after the implementation of ZHONGJIN Gold's debt-to-equity swap.Three dimensions of market response,financial effect,and non-financial effect of the stage are analyzed;Finally,this article evaluates the market-oriented debt-to-equity swap plan of ZHONGJIN Gold and puts forward suggestions for improvement.For example,the government should improve supporting measures,participants should set up a pricing mechanism,the company should limit debt financing expansion,and improve corporate governance structure.Through research,it is found that debt-to-equity swap is a process of participating in a multi-party game.Always pay attention to the interests and risks of the participants,and formulating a reasonable plan is the key to ensuring the smooth implementation of debt-to-equity swaps.The implementation of market-oriented debt-to-equity swaps will help reduce the company's debt-to-asset ratio,enhance operating capabilities,improve capital structure,enhance investment and financing capabilities,and improve corporate governance.It will also help to further improve my country's supporting laws and policies.However,from the perspective of implementation effects,market-oriented debt-to-equity swaps still have limitations and deficiencies.This article will explore valuable experience from the case study of ZHONGJIN Gold's debt-to-equity swaps,with a view to enriching the deficiencies of existing research and providing reference for subsequent debt-to-equity swaps.