China Railway Market-oriented Debt-to-equity Case Study

On the issue of debt-to-equity conversion,domestic and foreign scholars have studied quite a lot,in our country has experienced two rounds of debt-to-equity conversion,this article on the basis of the comparison of the two rounds of debt-to-equity,based on the current round of market-oriented debt-to-equity conversion,through the analysis of China Railway debt-to-equity conversion this specific case,to find out the debt-to-equity conversion process in the implementation process and can learn from the problems,and put forward suggestions for the problems.As a large-scale infrastructure state-owned enterprise in China,its development and the development of the national economy have been inseparable,and as the first construction of the state-owned enterprises to implement market-oriented debt-to-equity,the market response brought about by china’s large-scale infrastructure is not ordinary.China Railway this implementation of market-oriented debt-to-equity conversion on the one hand,there are industry cycle factors,on the other hand,the enterprise’s own business characteristics decided.This debt-for-equity swap is also in response to supply-side structural reforms and promotes enterprise transformation and upgrading.This paper combs through the case of China Railway debt-to-equity conversion and analyzes its characteristics,and then analyzes the impact aspects of the implementation of this debtto-equity swap,which is divided into two main aspects,one is the financial impact,and the other is non-financial.The methods used in the impact analysis of the financial aspects include ratio analysis,historical comparative analysis,and peer comparative analysis,hoping to have a definite understanding of the financial impact of the debt-to-equity transfer process.In terms of non-financial impact,the analysis focuses on the changes in equity value,governance structure,corporate development strategy and social benefits and so onThrough the combing of the case and the impact of the above two aspects,it is concluded that the implementation of this debt-for-equity swap program is a lack of social capital on the source of funds,the lack of local asset management companies on the implementing institutions,and the "two-step" implementation model of short intervals,these,problems may make debt-for-equity swaps on subsequent equity management and corporate governance aspects of poor,followed by this article also Suggested measures were put forward on these issues.In the implementation of this China Railway debt-to-equity conversion process,there are many references,such as adhere to the market-oriented thinking,combined with the enterprise’s own situation to implement debt-to-equity conversion,as well as leading the implementation of institutions to take the lead in promoting debt-to-equity conversion.This article hopes that the research of this debt-to-equity swap will promote the implementation of more debt-for-equity projects in the future.