Research On The Motivation And Performance Of The Bankruptcy Reorganization Of Lutianhua

Since 1994,various preferential policies have been implemented in the production and circulation of chemical fertilizer industry,which has promoted the rapid development of Chinese chemical fertilizer industry.By 2008,China’s fertilizer industry gradually appeared overcapacity,low market concentration,chemical fertilizer production link pollution problems also caused people’s attention.Since 2015,China has gradually cancelled various preferential policies such as tax on chemical fertilizer industry,and formulated the action plan of "zero growth of chemical fertilizer".Some enterprises in the chemical fertilizer industry have suffered a decline in benefits,and even went bankrupt.In order to achieve the purpose of transformation,Lutianhua,Salt Lake shares and other fertilizer enterprises in bankruptcy predicament choose to enter the bankruptcy reorganization process.Through searching data,it is found that since 2015,most of the enterprises facing bankruptcy predicament due to financial crisis will choose to avoid bankruptcy liquidation through reorganization.Due to the downward market economy of the fertilizer industry,most of the fertilizer enterprises facing bankruptcy predicament in China have problems of financial crisis and operation management.In this context,this thesis takes Sichuan Lutianhua Co.,LTD.,a large state-owned enterprise in China,as an example to analyze whether bankruptcy reorganization is beneficial for enterprises to get rid of bankruptcy plight when facing financial crisis.It has certain reference significance for chemical fertilizer enterprises in financial distress.This thesis mainly adopts the method of literature research,event research,comparative analysis and other methods,through the analysis of the causes of bankruptcy reorganization of Lutianhua and the reorganization measures taken,clear the rationality of the enterprise to choose to enter the reorganization process;Through the event study method,vertical financial index analysis method and entropy weight method to analyze and summarize the effect of the market reaction and financial performance of the enterprise after restructuring,evaluate whether the purpose of the enterprise restructuring to meet,and the impact of restructuring behavior on the enterprise’s sustainable operation ability;Through horizontal financial index analysis,the development status of Lutianhua industry is analyzed,and the influence of market environment on enterprise development is investigated.Finally,it analyzes the existing problems after the reorganization of the enterprise and gives corresponding suggestions.Through the research,the following conclusions are drawn: Lutianhua have the value and possibility of regeneration,and the reason for entering the bankruptcy reorganization process is reasonable;The debt-to-equity conversion plan adopted by Lutianhua for restructuring has saved the enterprise to a great extent,made it get rid of the financial crisis,reduced the debt burden,and gained the vitality of sustainable operation due to a large amount of capital injection,significantly improved the short-term performance of the enterprise,and maintained the ability of sustainable operation of the enterprise,indicating that the restructuring plan of the enterprise debt-to-equity conversion is more suitable for its own situation.Having the prerequisite for the success of reforming;However,the debt-to-equity swap program has a great effect on the debt burden,but has little impact on the operating profit of enterprises.Therefore,although the short-term performance of enterprises can be improved,the short-term impact is greater than the long-term impact,and the long-term performance is more dependent on the operation and management measures taken by enterprises and the market conditions of the industry.In addition,the current fertilizer market environment is not ideal due to the influence of the national policy of "overcapacity reduction" and "zero growth of fertilizer".Although the operation trend of fertilizer enterprises has been improved in recent two years due to the influence of international market supply and demand and extreme weather,in terms of the long-term development of enterprises,the product structure still needs to be optimized to achieve efficient and green products.