Research On The Impact Of Market-Oriented Debt To Equity Swap On The Steel Industry

In order to deal with the financial crisis in 2008,China has increased a large number of investment behavior,but also made the debt scale surge,resulting in the addition of huge non-performing assets to commercial banks,and the anti risk ability of enterprises continues to weaken.In order to correct the disadvantages,the state has formulated the task of "deleveraging",and the tool of debt to equity swap has been used again.With the release of the guidance on market-oriented debt to equity swap,debt to equity swap projects have been launched one after another.By the end of June 2021,the total landing capital has reached 1.69 trillion yuan,of which the iron and steel industry,as a key industry to reduce production capacity,accounts for about a quarter.In this context,the market-oriented debt to equity swap and its implementation effect have become a hot topic in the field of financial research.Taking Valin steel as an example,this paper analyzes the impact mechanism and effect of market-oriented debt to equity swap on the performance of steel enterprises.In the research process,this paper first reviews the relevant literature,combs the debt to equity swap policy documents and governance theory,and builds a theoretical framework for the follow-up analysis,then analyzes the specific implementation process of Valin Steel’s debt to equity swap,and finally uses the financial index analysis method and factor analysis method to evaluate the performance changes of Valin steel,Test the ways of debt to equity swap affecting enterprise performance.It is found that:(1)the driving effect of market-oriented debt to equity swap on the performance of iron and steel enterprises is realized through capital structure adjustment,governance effect and high-quality resource reorganization.(2)Debt to equity swap can significantly improve the Solvency Index,profitability index and operating capacity index of Valin Iron and steel,but has no obvious effect on the growth of enterprises.(3)Through factor analysis,it is found that the performance ranking of Valin steel has improved significantly after debt equity swap,indicating that debt equity swap has a positive effect on the performance of Valin steel.