Research On The Causes And Countermeasures Of Bond Default Of Yongcheng Coal And Electricity Holding Group Co.,Ltd

Since the "11-Chaori bond" default broke the rigid payment in China’s bond market in 2014,the market risk has been gradually exposed,and the phenomenon of default is common.By the end of 2020,the scale of bond default in China had reached 141.419 billion yuan,the highest over the years,and the scale of AAA default of Chinese enterprises had also reached 51.897 billion yuan,the highest over the years.As the most eye-catching event in the wave of default of high-grade credit bonds of state-owned enterprises,Yongcheng coal and electricity’s bond default has had a huge impact on the bond market.Based on this background,this paper selects the bond default of Yongcheng coal and electricity,a large state-owned coal enterprise,as the research object.Firstly,it combs and summarizes the current academic literature on the causes of bond default,risk early warning and preventive measures;Secondly,it introduces the basic situation of Yongcheng coal and electricity,and focuses on the process of bond default and subsequent disposal;Thirdly,it makes an in-depth analysis of the causes of Yongcheng coal and electricity’s bond default from the external and internal perspectives;Finally,through the cause analysis,this paper puts forward the corresponding countermeasures for Yongcheng coal and electricity to break through the debt dilemma.Through the case analysis,this paper draws the following conclusions: In terms of external cause analysis,Yongcheng coal and electricity operation is difficult,the debt is not smooth,and the capital chain is broken due to the macroeconomic downturn,the tightening of financing environment and the acceleration of capacity reduction in the coal industry.In terms of internal cause analysis,first,corporate governance problems are prominent.Under the dominant ownership structure,the unreasonable arrangement of the company’s capital control system and weak internal control lead to financial fraud and serious occupation of funds by related parties.The extreme lack of company funds directly leads to the occurrence of debt default.Second,under the company’s diversification strategy and undertaking policy burden,the unreasonable investment layout leads to the owner’s equity structure and its imbalance.At the same time,in recent years,the non coal business has seriously dragged down the company’s overall profit and made the company lack of hematopoietic capacity.Third,the company’s improper financing strategy and excessive reliance on creditor’s rights financing lead to problems such as large-scale and maturity mismatch of the company’s debt.The company has great debt repayment pressure and tight financing environment,which eventually leads to the rupture of the company’s capital chain and the inability to honor the maturing bonds.Fourth,The company is in poor financial condition,its profitability is poor,its long-term and short-term solvency is weak,and finally its cash flow is insufficient,resulting in financial difficulties.This paper puts forward the following countermeasures:improve the sensitivity to changes in the external environment,improve the company’s capital control system and internal control system,deeply cultivate the main business and speed up the stripping of loss making business,optimize the company’s capital structure and debt structure,and strengthen the company’s financial risk management level.