Research On The Implementation Effect Of Market-Oriented Debt-to-Equity Swap In Chongqing Iron And Steel

In recent years,my country’s economy is at an important stage of economic transformation and economic structure optimization.However,as the economy enters the "new normal",the downward pressure on the economy has intensified.While enterprises enjoy the favorable economic benefits brought by relying on high investment,they also Inevitably,the fact that the leverage ratio has increased in the high-borrowing financing model has increased.In order to speed up the removal of excess capacity,the supply-side reform policy centered on "three reductions,one elimination and one supplement" came into being.High energy-consuming industries such as iron and steel are the focus of this reform.Most iron and steel enterprises have been constrained by the liquidity crisis for a long time,and the leverage ratio has remained high.However,due to the short period of marketization of bond-to-equity swap in my country,although it has brought many benefits,there is little experience in the relevant areas.Problems such as "many contracts but difficult to implement" and "debt on clear stocks" are common.Therefore,it is of great significance to conduct in-depth research on companies that have successfully implemented market-based debt-to-equity swaps.This paper takes Chongqing Iron and Steel,which turned losses into profits by implementing market-oriented debt-to-equity swaps in bankruptcy and reorganization procedures,as the case study object,and conducts an in-depth analysis of its business performance before and after the debt-to-equity swap.In terms of analyzing the motivation,from the macro to the micro level,the specific reasons for Chongqing Iron and Steel’s implementation of debt-to-equity swap are expounded from the inside out.In terms of implementation effect,this paper comprehensively analyzes the changes of financial effect,market effect and governance effect of Chongqing Iron and Steel before and after the debt-to-equity swap with the help of financial index evaluation system,radar chart method,event research method,Tobin’s Q value,and Z-Score model.In terms of reference objects,we focus on selecting the data of the iron and steel industry and iron and steel enterprises of similar scale to carry out systematic analysis.After a systematic analysis of the case,the research conclusions are as follows: 1."De-leveraging" has become a stubborn problem that iron and steel enterprises need to overcome urgently.2.Market-oriented debt-to-equity swaps can help Chongqing Iron and Steel reduce its leverage and improve its quality and efficiency.3.Enterprises should also continuously strengthen their own operation and management to give full play to the long-term effect of debt-to-equity swaps.This paper summarizes the experience of debt-to-equity swaps involving state-controlled listed companies with the largest debt scale,in order to provide relevant path reference for equity-swapping companies,so as to promote the stable and orderly development of the market economy.