| In order to develop steadily,enterprises need to have a good asset structure and sufficient financial support.Due to the impact of the economic,crisis in previous years,many enterprises in China are short of funds and rely too much on debt funds to operate enterprises,which makes the asset liability ratio of many enterprises too high.Many enterprises encounter business risks and borrow from banks to make up for their own capital gap.Therefore,in recent years,China has begun to implement supply side reform,and many highly leveraged enterprises have begun to implement the "deleveraging" policy,Among them,the more obvious is the effect of reducing leverage through debt to equity swap;thus,in recent years,China began to implement supply-side reform,and many enterprises in high leverage began to implement "The first round of debt-to-equity conversion was carried out in China,which was mainly led by the government of China,The purpose is to reduce the debt capital pressure of many state-owned enterprises and reduce the high leverage ratio of state-owned enterprises;During this period,the fuds were mainly carried out by the four major asset management companies of China under the support and supervision of the State Council and the Ministry of finance.During this period,the asset management institutions mainly purchased the creditor’s rights of highly leveraged state-owned enterprises with good development prospects from banks and transformed the creditor’s rights of state-owned enterprises with low operating efficiency into their equity,At the same time,it can deal with the non-performing assets of banks.However,recently,many enterprises have emerged with high leverage again,and many enterprises with high gearing have also encountered debt problems,so China issued the "Guidance on the Conversion of Market-based Bank Debt into Equity" in 2016 in conjunction with the strategic orientation of China’s supply-side reform,and the issuance of this version of the opinion symbolizes the beginning of market-based debt-to-equity conversion in China,and the implementation of this market-based debt-to-equity conversion can effectively reduce The implementation of this market-oriented debt-to-equity conversion can effectively reduce the leverage ratio of enterprises and lower the capital risk of enterprises,which makes the future development of enterprises more robust.Taking China Aviation Power Co.,Ltd.(hereinafter referred to as"aviation power")as the case study object of the text,through the literature reading and data sorting related to debt to equity swap,through the literature and data related to debt-to-equity conversion,to study the impact of market-oriented debt-to-equity conversion on the market value of enterprises under the background of leverage reduction and reform of state-owned enterprises,and to study the financial performance of enterprises before and after the debt-to-equity conversion.We also study the financial performance of enterprises before and after the debt-to-equity conversion,and analyze the impact of market-based debt-to-equity conversion on the financial performance of Aviation Power.As a leading enterprise in the aerospace equipment manufacturing industry in the manufacturing industry classified by the CSRC,Hangfa power actively responded to the policy call of China’s structural adjustment and took the lead in making a model of implementing the market-oriented debt to equity swap strategy,which has a good reference for enterprises in other military industries.This paper makes a detailed investigation and summary on the detailed steps and driving factors of the market-oriented debt to equity swap of aviation power.In the subsequent case study,we analyze the financial situation before and after the debt-to-equity conversion mainly through comparative analysis,and find that the occurrence of the debt-to-equity conversion has significantly improved the enterprise’s short-term solvency and profitability and development capacity.Also,the impact of market-oriented debt to equity swap on the market performance of the enterprise was observed through the event research method,and it was found that the cumulative excess return has been effectively improved,Promoting the value of enterprises;Through the comparison of financial index method and corresponding EVA,this paper makes a detailed analysis on the impact of the market-oriented debt to equity swap on the financial performance of Hangfa power.Finally,according to the results of the analysis,this market-oriented debt to equity swap is positive and successful for Aeroengine power in the short term,and has achieved the goal of reducing the asset liability ratio of the enterprise and the target company,but it needs further observation in the long-term development.Finally,through the implementation effect of debt equity swap of aviation power,this paper gives suggestions and opinions for other companies that may implement market-based debt-to-equity conversion in the future through the effect of the implementation of the debt-to-equity conversion of ADF,and gives reference to other aerospace equipment manufacturers with debt-to-equity conversion potential. |
