Research On The Impact Of The Market-Oriented Debt-to-Equity Swap Of Private Enterprise NG On Enterprise Performance And Its Countermeasures

In recent years,the domestic economic development has entered a "new normal",the macroeconomic growth rate has declined,the debt burden of non-financial enterprises has increased,and the leverage ratio has continued to increase.Many traditional industries,including the steel industry,are facing excess capacity and excessive debt.In order to reduce debt risks,government departments have introduced a series of policies to boost supply-side structural reforms,and market-based debt-to-equity swaps have also emerged.At present,the real-time process of domestic market-oriented debt-to-equity swaps is still in the stage of gradual development,the number of existing cases that can be studied and learned from is not enough,and some schemes have not been successfully implemented.Even if the project is successfully implemented,there are more or less some areas for improvement in the operation process.The implementation of debt-to-equity swaps abroad also started late,and the implementation experience that can be brought to domestic enterprises for reference is not rich enough.This paper hopes to comprehensively sort out the entire operation process of the market-oriented debt-to-equity swap of private enterprise NG,analyze the valuable experience of its successful implementation and smooth progress,and further comprehensively evaluate the specific impact and impact path of the implementation of the plan on enterprise performance.It is hoped that it will effectively help the formulation,operation structure and implementation process of the private debt-to-equity swap program become more standardized and achieve better results.Market-oriented debt-to-equity swap refers to the behavior of all fair market entities to convert the creditor’s rights of commercial banks,asset management companies and other financial entities on enterprises into equity through market-oriented means under the conditions of equality and voluntariness.During the whole process,the government department does not directly interfere with the independent negotiation between the implementing agency and the debt-to-equity swap enterprise,but through the formulation and improvement of laws and policies,it actively guides all participants to follow the market-oriented principle to carry out the debt-to-equity swap.Different from the previous round of debt-to-equity swap,the purpose of this market-oriented debt-to-equity swap is not only to reduce the leverage ratio of enterprises,but more importantly,to promote the improvement of enterprise management and transformation and upgrading.This paper analyzes the impact of the market-oriented debt-to-equity swap of private enterprise NG on corporate performance and its countermeasures from the following perspectives.First of all,this paper introduces the theoretical basis of the research from MM Theory,Trade-off Theory and Agency Theory.Secondly,from the three perspectives of motivation,operation mode and implementation performance,the domestic and foreign literatures are classified and sorted,and it can be found that the relevant theoretical achievements in this field are relatively abundant.Finally,this paper briefly reviews the implementation of the last round of policy-based debt-to-equity swaps in China,compares it with the current round of market-oriented debt-to-equity swaps from multiple dimensions,and introduces the common patterns of debt-to-equity swap implementation along with realistic implementation difficulties and favorable conditions of debt-to-equity swap in private enterprises at this stage.In the case of the market-oriented debt-to-equity swap of private enterprise NG,this article introduces the basic situation of private enterprise NG,the company’s main business,core competitiveness and financial status.It can be found that private enterprise NG has a good development prospect,but it is currently facing heavy debt load.From the perspective of macroeconomics,industry development and favorable external factors of policies,as well as internal factors of profitability,cash flow pressure and debt burden,this paper analyzes the motivation of the market-oriented debt-to-equity swap of private enterprise NG.It specifically shows the implementation process of the market-oriented debt-to-equity swap of private enterprise NG,and analyzes the market-oriented debt-to-equity swap of private enterprise NG from the four perspectives of the implementing agency and the target of the swap,the pricing method of equity conversion,equity holding regulations,and the method of equity exit.In terms of performance and impact path analyses of the debt-to-equity swap of private enterprise NG,firstly,it analyzes the overall profitability of private enterprise NG,introduces the growth of operating income and net profit,and compares profitability indicators with comparable companies,and finds that market-oriented debt-to-equity swaps have indeed effectively improved the profitability of enterprises.Secondly,based on the event research method,the implementation of market-oriented debt-to-equity swaps by private enterprises NG has had a negative impact on the short-term market performance,which shows investors are generally skeptical that the debt-to-equity swap can be successfully implemented.Then,it analyzes the improvement of Economic Value Added after the implementation of market-oriented debt-to-equity swap by private enterprise NG.The Economic Value Added of the case company has increased significantly after the implementation of debt-to-equity swap.Finally,it specifically introduces how market-oriented debt-to-equity swaps reduce debt financing costs by improving operating conditions,improve corporate governance structure by optimizing equity composition,and reduce agency costs by formulating equity incentive plans.It can be found that the private enterprise NG has carried out the debt-to-equity swap in accordance with the principle of marketization.In general,it has been relatively successful in terms of process and results.Now that private enterprise NG successfully implemented market-oriented debt-to-equity swaps early,we can draw a wealth of successful experience through a comprehensive review of its debt-to-equity swap.First of all,the implementation of market-oriented debt-to-equity swaps must adhere to the "market-oriented" principle,and private enterprises must strengthen the establishment and improvement of information disclosure mechanisms,break stereotypes and actively seek investors in the market,independently negotiate with various implementing agencies,and strive for successful implementation of market-oriented debt-to-equity swap.Secondly,if private enterprises want to compete with state-owned enterprises for cooperation opportunities of market-oriented debt-to-equity swaps,they must strive to improve the design of market-oriented debt-to-equity swaps.In this round of debt-to-equity swaps,the choice of the target of the swap is more free.Enterprises can use high-quality subsidiaries as targets to compete for market-oriented debt-to-equity swap implementation opportunities,formulate reasonable and fair pricing methods,and improve the equity exit mechanism.Finally,combining the implementation of debt-to-equity swaps with management reform is the long-term solution to the development dilemma of private enterprises.Enterprises can optimize corporate governance through incentive mechanisms,and actively promote the transformation and upgrading of corporate warfare by taking advantage of the implementation opportunities of market-oriented debt-to-equity swaps.