Study On The Causes And Countermeasures Of Debt Default Of State-owned Enterprises

Since 2014,affected by the macroeconomic environment and the state’s regulation of the financial environment,debt defaults in China’s credit bond market have occurred frequently,and state-owned enterprises have also begun to have debt defaults.The subject of default has gradually shifted from private enterprises to the coexistence of private enterprises and stateowned enterprises.In the past two years,the total number and amount of bonds in default and the number and amount of bonds in default of state-owned enterprise debt have reached a peak.In 2021,the number of new debt default bonds was 129,with a default amount of 170.559 billion yuan,and the number of new debt default bonds of state-owned enterprises was 66,with a default amount of 77.705 billion yuan.With the rapid growth of debt defaults of state-owned enterprises,the belief of "rigid cashing" of state-owned enterprises in people’s hearts has been gradually impacted.This paper hopes to take the debt default event of Yongcheng Coal &Electricity Holding Group Co.,Ltd.in November 2020 as an example to explore the causes of debt default of Yongcheng Coal & Electricity Holding Group Co.,Ltd.as a heavyweight stateowned enterprise,and put forward preventive countermeasures against debt default for investors,enterprises,regulators and rating agencies according to the causes.This paper mainly adopts the literature research method and case study method to study the causes of debt default of state-owned enterprises taking Yongcheng Coal & Electricity Holding Group Co.,Ltd.as an example.The main innovations focus on: Taking state-owned enterprises as the research subject,studying the impact of consolidated statements and parent company statements on default,and giving preventive countermeasures from multiple angles.The main part is divided into four chapters: the first chapter summarizes the debt default of the whole bond market and the debt default of state-owned enterprises in China from the perspective of the number of defaulting subjects,the number of defaulting bonds,the amount of default,the industry situation and rating situation of defaulting subjects,and summarizes and analyzes the main causes of debt default of state-owned enterprises in recent years;The second chapter introduces the company of Yongcheng Coal & Electricity Holding Group Co.,Ltd.and the general situation of debt default events;The third chapter analyzes the financial performance of Yongcheng Coal & Electricity Holding Group Co.,Ltd.’s debt default,and analyzes and summarizes the causes of this debt default event at the macroeconomic level,coal industry level and company level;The fourth chapter puts forward countermeasures and suggestions to prevent debt default for companies,investors,regulators and rating agencies,and summarizes this paper.After research,this paper believes that the main causes of Yongcheng Coal & Electricity Holding Group Co.,Ltd.’s debt default are as follows: first,under the dual effects of slowing economic growth and tightening financing policies,the debt guarantee ability decreases and financing activities become more difficult;Second,the company’s non coal business has dragged down its profitability,occupied a lot of funds,reduced the speed of cash turnover,and made the cash flow generated by the company’s operating activities unable to pay its debts in time;Third,as the main body of independent debt repayment,compared with the group as a whole,the parent company has weak solvency,cash flow and current assets can not cover the principal and interest of debt,weak control over monetary funds,large occupation of funds by subsidiaries,and concentrated pressure on bond financing and repayment;Fourth,Yongcheng Coal & Electricity Holding Group Co.,Ltd.has a huge amount of inter-bank lending to affiliated companies.On the one hand,the funds of the parent company of Yongcheng Coal &Electricity Holding Group Co.,Ltd.are seriously occupied by its own subsidiaries,and the amount of other receivables is huge and the liquidity is poor.On the other hand,most of the monetary funds of Yongcheng Coal & Electricity Holding Group Co.,Ltd.are deposited in the financial company of Henan energy and chemical group and used in other businesses of other companies,which can not be used at will;Fifth,the controlling shareholders and actual controllers of Yongcheng Coal & Electricity Holding Group Co.,Ltd.are also facing financial difficulties.The rescue ability of Yongcheng Coal & Electricity Holding Group Co.,Ltd.is poor,and the negotiation and communication is not timely.In the end,Yongcheng Coal & Electricity Holding Group Co.,Ltd.can only face the debt by itself.It also puts forward preventive countermeasures for enterprises: optimizing business structure,optimizing debt structure and establishing financial index early warning line;Put forward preventive countermeasures for regulators: strengthen the punishment of false high ratings by rating agencies,and strengthen the supervision of the funds occupied by financial companies in the group company;Put forward preventive countermeasures for rating agencies: pay attention to consolidated statements and parent company statements at the same time,and establish a more sound rating mechanism;Put forward preventive countermeasures for investors: reduce the blind belief in the "rigid cashing" of state-owned enterprise bonds,and pay more attention to the company’s own financial data.