Research On The Implementation Effectiveness Of Debt-to-Equity Swap Of Private Listed Companies In China

In October 2016,the State Council issued the "Opinions on Actively and Prudently Lowering the Leverage Ratio of Enterprises",marking the start of this round of debt-to-equity swaps.Different from the first round of debt-to-equity swaps,this round of debt-to-equity swaps emphasizes the use of market-oriented methods and encourages qualified private enterprises to participate in the implementation to help companies reduce leverage and promote corporate transformation.In addition,in December 2019,the State Council issued the "Opinions of the Central Committee of the Communist Party of China and the State Council on Creating a Better Development Environment to Support the Reform and Development of Private Enterprises",which further requires that the vitality and creativity of private enterprises be stimulated,and private enterprises are fully utilized in advancing supply-side reforms.An important role in building a modern economic system.However,as of the end of 2019,more than 100 companies have implemented market-based debt-to-equity swaps across the country,and the contracted amount has reached 3.8 trillion yuan,of which private companies only accounted for 15.19%.It can be seen that the market-oriented debt of private companies The implementation of the share transfer was not smooth.This article adopts the method of case analysis and chooses Huayou Cobalt,the first listed private company in my country that has successfully passed the meeting,as the research object of the implementation of private enterprise debt-to-equity swaps.As a leading company in my country’s non-ferrous industry,the success of Huayou Cobalt Implementation has important reference significance for other private enterprises.The effect of the implementation of market-oriented debt-to-equity swaps is embodied in the changes in the market value of the company.At the same time,the market value of the company can also reflect the returns that the company brings to shareholders and the benefits to creditors,executives and other groups.Therefore,this article focuses on the indicator of Huayou Cobalt’s corporate value,using event research method,financial performance evaluation method,comparative analysis method,economic value-added method and other methods to analyze the implementation of market-oriented debt-to-equity swaps from multiple perspectives.The impact of corporate value.The conclusions drawn from the analysis of this article are as follows:(1)Huayou Cobalt is the right choice to implement market-based debt-to-equity swaps;(2)Debt-to-equity swaps may have a negative announcement effect in the short term;(3)Market-based debt-to-equity swaps can optimize the financial status of the company and improve the company Value;(4)Market-oriented debt-to-equity swaps rationalize corporate investment and reduce financing costs;(5)Market-oriented debt-to-equity swaps have certain uncertainties.Finally,this article summarizes the successes and failures of Huayou Cobalt’s market-oriented debt-to-equity swaps,and proposes suggestions for the continued implementation of debt-to-equity swaps from three perspectives: enterprise selection,market principle and the government.