| With the slowdown of China’s macroeconomic growth and the increasing pressure on the real economy,the market-oriented debt to equity swap came into being under the background of the increase of bank non-performing loan ratio and financial risk.Different from the previous round of policy debt to equity swap,this round of debt to equity swap adheres to the principle of marketization,with the main purpose of solving enterprises’financial difficulties,improving operating efficiency and resolving bank financial risks,which has been strongly promoted by national policies.However,in practice,the slow progress of debt to equity swap of private enterprises has become an urgent problem to be solved.Yuanxing energy is one of the first private enterprises to implement debt to equity swap in China,which is typical,and the design of its implementation scheme is innovative.This paper takes its debt to equity swap as the research object,summarizes its successful experience through case analysis,and expects to provide useful case reference for debt to equity swap of other private enterprises in the future.This paper first summarizes the previous research experience of debt to equity swap,summarizes and combs the motivation,path and performance impact of debt to equity swap,and then analyzes the current situation of market-oriented debt to equity swap in China.It is found that the low participation of private enterprises in China is mainly limited by their small scale,difficult financing and the current provisions on the scope of application of debt to equity swap.Then,based on the characteristics of private enterprises,this paper makes a mechanism analysis on the motivation and performance impact path of China’s private enterprises participating in market-oriented debt to equity swap,so as to lay a theoretical foundation for the later case analysis.In the case introduction part,this paper first investigates the operation and financial situation of Yuanxing energy,and finds that the industry in which Yuanxing energy is located has developed well in recent years,and some subsidiaries have competitive advantages in similar industries and rank among the industry leaders.However,some subsidiaries,such as Boyuan coal chemical,have declined in performance and lost profits due to the background of the industry.In general,one or two years before the implementation of market-oriented debt to equity swap,Yuanxing energy had good profitability and growth ability and high financial risk.It was a high-quality enterprise with temporary difficulties and met the conditions for screening the target enterprises of this round of market-oriented debt to equity swap.Then this paper introduces the whole debt to equity swap scheme and the specific process in detail.In the case analysis part,this paper first analyzes the motivation from the external environment and the internal two dimensions of both sides.Secondly,this paper deeply analyzes the rationality of Yuanxing energy’s choice of stock issuance and debt repayment mode,and focuses on the innovative arrangement in its market-oriented debt to equity swap project scheme,so as to provide reference experience for private enterprises to participate in market-oriented debt to equity swap in the future.Thirdly,this paper analyzes the performance of Yuanxing energy after the implementation of debt to equity swap,and finds that the company has obvious changes in capital structure and debt structure.In addition,Everbright Yongming has nominated a director to the board of Yuanxing to supervise and encourage it,and the agency cost has been reduced,which has improved the company’s financial situation and corporate governance structure;It has improved its solvency and growth ability.Finally,it is concluded that debt to equity swap has played a role in this case.Debt to equity swap has greatly improved the company’s financial performance and laid a good foundation for the company’s long-term development. |
