| At the end of last century,against the background of continuous losses of state-owned enterprises and expanding scale of non-performing bank loans,China opened the first round of government-led debt-to-equity swap.At present,China’s economy has embarked on a new stage of high quality and steady development,but the scale of non-performing assets is also increasing.In this context,China officially opened a new round of market-oriented debt-to-equity conversion.The government was the main player in the last round of debt-to-equity transfer,while in the current round of debt-to-equity transfer,it is mainly the role of the market.The current round of debt-to-equity conversion not only helps enterprises to reduce their debt burden,but also helps enterprises to improve their internal governance and optimize their capital structure to promote their long-term development.As a leading enterprise in the gold industry,Zhongjin Gold is facing difficulties in its operation and development in the face of fierce competition in the industry,and urgently needs to find a breakthrough to improve its financial performance.Therefore,CICC Gold decided to seize the opportunity of this market-based debt-to-equity conversion,and based on the traditional market-based debt-to-equity conversion model,chose for the first time to adopt a comprehensive debt-to-equity conversion model with asset injection and raising matching funds,which is of reference significance.This paper adopts literature research method,case study method and other research methods to study and analyze the case of Zhongjin Gold,analyze its specific implementation plan and effect,draw lessons from it,find problems,and put forward improvement suggestions.Firstly,the literature on debt-to-equity conversion at home and abroad is reviewed,and the relevant concepts and theoretical foundations are defined and summarized;then,the development history and main products of Zhongjin Gold are introduced,and the business and financial situation of the company before the debt-to-equity conversion is analyzed,and the operation process of the project is introduced in detail;then,the motivation of the company to implement the debt-to-equity conversion is mainly national policy guidance,improving Then,we analyzed that the motivation for the implementation of debt-to-equity conversion was mainly national policy guidance,improving the business situation and promoting enterprise reform.We also summarized the five features of the debt-to-equity program,namely,introducing large-scale social capital,rapidly reducing corporate leverage,properly solving the pricing problem between debt and equity,nesting high-quality assets into the debt-to-equity,and providing a smooth equity exit channel.Then the implementation effect of Zhongjin Gold’s debt-to-equity conversion is discussed,and the mechanism of the effect of the implementation effect is analyzed.Finally,on the basis of the previous study,insights are drawn and recommendations are given from the perspective of enterprises and investment institutions.Through the study,it is found that the debt-to-equity swap needs to be completed through continuous negotiation among the participating parties.It is important to take all parties into consideration and develop a mutually satisfactory plan to ensure the smooth implementation of the project.The implementation of market-based debt-to-equity conversion can effectively reduce the asset-liability ratio of enterprises,improve the operation level of companies,improve the equity structure of companies,and optimize the internal governance of companies.However,in terms of its implementation effect,the current market-based debt-to-equity conversion still has certain limitations and defects.This paper summarizes some valuable experiences through the case analysis of CIMB’s bond-to-equity conversion,hoping to provide reference for enterprises conducting debt-to-equity conversion in the future. |
