Research On The Implementation Plan And Effect Of China Railway Market-oriented Debt-for-equity Transfer

COVID-19 broke out in 2020 and spread rapidly around the world,and the downward pressure on the economy continued to increase.At the same time,global trade protectionism rose and the trend of anti-globalization constantly intensified.In this context,the state calls for a good job in the "six stability",actively implements the task of the "six guarantees",and constantly forms a "new development pattern with the domestic cycle as the main body and the domestic and international cycles promoting each other".The implementation of market-oriented debt-for-equity swap is of important strategic significance to the realization of the above goals.As the first central construction enterprise to implement market-oriented debt-for-equity swap,China Railway has set a new benchmark with its innovative new "two-step" model.Therefore,this paper selects China Railway as the case study object.Firstly,this paper uses literature research to analyze the relevant theory of market debt-equity swap,laying the foundation for case analysis.Subsequently,this paper briefly introduces the plan and process of its debt-for-equity swap,describe the case background,and explain why China Railway implements the market-oriented debt-for-equity swap from the national,industry and enterprise internal environment.Then,the specific analysis of the debt-to-equity swap plan from the trading subject,the pricing mechanism,the mechanism of debt-for-equity swap and the exit mechanism respectively explained that China Railway has realized the market-oriented debt-to-equity swap in a "how" way,hoping to provide effective reference for other enterprises in the implementation of the market-oriented debt-to-equity swap.Finally,respectively from the perspective of market effect,financial performance,non-financial impact on the implementation of the market debt analysis: first,with signal transmission theory explained the market debt impact mechanism of market effect,and using the CAR value analysis and BHAR analysis of the market effect,think the market positive attitude towards China railway market equity swap,enhance the value of China railway market.Second,the capital structure theory is used to explain the role mechanism of the market-oriented debt-for-equity swap to improve the company’s financial performance,and it is verified through financial indicators and EVA.Third,the use of information asymmetry theory and entrusted agency theory to explain the impact of market-oriented debt-for-equity swap on the non-financial indicators of the company,believing that the debt-for-equity swap promotes the diversification of the company ’s equity structure,reduces the company’ s agency cost and improves the company’s operating mechanism.And the problems existing in the process of market-oriented debt-for-equity swap are summarized,and put forward constructive opinions.The paper found that the implementation of market-oriented debt-to-equity swap has played a positive positive effect on China Railway,reducing the company’s asset-liability ratio,improving the corporate governance structure and enhancing the enterprise value.Although the process of the scheme implementation exposed the spot profit is diluted,induce interest moral risk,but the implementation of the scheme is the relatively correct choice under the background of The Times,not only played a positive role in the future development of China Railway,at the same time innovated the market-oriented debt-for-equity model,for other large amount of central enterprises market-oriented debt-for-equity also provides inspiration and advice,has a strong significance of the Times.