A Study On The Strategy And Effect Of Bankruptcy Reorganization Of BESTWAY

Shipbuilding industry in China has suffered from structural overcapacity and low industrial concentration for a long time,so transformation and upgrading became the gate for enterprises to achieve long-term development.In order to realize strategic transformation,some enterprises integrated industry resources through a large amount of investments,which may result in a good development prospect.However,Since 2015,China has faced downward pressure on macro economy,and continued to promoted deleveraging policies,the financing environment for highly leveraged enterprises was not optimistic.What’s more,due to some factors such as industry downturn or policy change,some enterprises got into cash flow dilemma,and began to default on the debts,some highly indebted enterprises began to file for bankruptcy.With the marketization,legalization and internationalization of China’s business environment,the bankruptcy law provides three ways to solve the enterprises’ debt dilemma,namely,bankruptcy liquidation,bankruptcy reorganization and bankruptcy reconciliation.Among them,the bankruptcy reorganization system enables those enterprises that are in debt difficulties but have going concern value to pay off debts through legal means,turn the corner and regain a new life.However,because it is not long after the bankruptcy reorganization law is promulgated in China and there are not many enterprises that complete bankruptcy reorganization system,it is of great significance to study the bankruptcy reorganization system.At present,the important literatures of studying bankruptcy reorganization system are mainly concentrated in the legal field.Their focus is how to establish and improve the legal system of bankruptcy reorganization.In order to help academic researchers’ and enterprise managers’ understand bankruptcy reorganization system from the perspective of finance and management,this paper focusing on the bankruptcy reorganization strategy,analyzes the effects of different reorganization strategies,and puts forward suggestions for enterprises to flexibly apply different strategies in practice.Using the case study method,this paper selects Bestway Marine&Energy Technology Co.,Ltd,which has been revitalized through bankruptcy reorganization in recent years,to analyze three strategies adopted in its process of reorganization:timely filing for reorganization,debtor in possession mode and dual investor mode,and then study their effects to draw the conclusions:timely filing for reorganization is conducive to protecting corporate assets;debtor in possession mode is beneficial to the continuity of enterprise’s operation;dual investor mode is beneficial for enterprises to obtain financing and develop better in future.Through the above analysis,this paper puts forward several suggestions for the enterprises that hope to get rid of financial difficulties and realize going concern after bankruptcy reorganization.First,apply for reorganization when the debtor is a "clear lack of liquidity" and it’s difficult to obtain financing;second,apply for debtor in possession after the bankruptcy reorganization application is accepted by the court when the debtor has a good internal control system;third,apply for the dual investor mode of"strategic investor+financial investor" to obtain financing when the debtor has a high pressure of repaying debts.The paper focuses on the innovative and typical reorganization strategies adopted by the case enterprise,and analyzes the substantive effects brought by these strategies,which enriches the research dimension of bankruptcy reorganization on the theoretical level,and provides case experience for the other enterprises with debt difficulties on the practical level.However,due to this case occurred in 2020,it is difficult for the author to analyze the effects from a long-term perspective,and because less domestic literatures study bankruptcy reorganization system from the perspective of reorganization strategy currently,there is room for improvement in the analysis dimensions and indicators of reorganization strategy and effect.In future studies,as more and more enterprises flexibly and innovatively choose reorganization strategies according to their actual conditions,academic researchers should use more data and methods,and choose more diversified analysis indicators to study the bankruptcy reorganization strategies and effects,so as to make the bankruptcy reorganization system further improved and better serve enterprises in difficulties.