Research On The Economic Effect Of Market-Oriented Debt-to-Equity Swap Of Aviation Equipment Enterprises Under The Background Of De-Leveraging

As the economy enters the new normal,the negative effect of high leverage operation mode on enterprises becomes more and more obvious,which increases the financial risk of enterprises and threatens the development of enterprises.In 2015,deleveraging was put forward as one of the main tasks to help enterprises reduce debt pressure and reduce the macro leverage ratio,so as to prevent and defuse financial risks.With the promotion of deleveraging,The State Council promulgated relevant policies in 2016,and market-based debt-to-equity swaps were officially launched to help enterprises get out of financial difficulties and achieve the effect of deleveraging.Under the influence of uncertain factors such as industry characteristics and economic recovery,some aviation equipment enterprises have high leverage.At the same time,our attention to aviation equipment industry is increasing day by day,aviation equipment industry development has been strongly supported,has good prospects for development,in line with the needs of national strategic development.AECC Aviation Power Co is a leading enterprise in the aviation equipment industry,but it also faces the dilemma of high debt and high leverage.In order to improve its financial situation,the company has decided to implement market-oriented debt-equity swap in 2019.This paper selects the AECC Aviation Power Co as the research object,firstly introduces the research background and significance of market-oriented debt-to-equity swap,combs and summarizes the viewpoints of domestic and foreign scholars on deleveraging and debt-to-equity swap,and determines the theoretical basis of this study.Then,this paper expounds the current situation of the marketization debt-to-equity in our country and the basic situation of the aviation equipment industry,and further analyzes the motivation of the marketization debt-to-equity in aviation equipment enterprises.Then,it introduces the basic situation of the AECC Aviation Power Co,analyzes the motivation of the implementation of market-oriented debt-to-equity swap,and introduces the specific plan of market-oriented debt-to-equity swap from four aspects: the participant,the operation procedure,the pricing mechanism and the exit mechanism.Finally,on the basis of relevant theories,the economic effect of the implementation of market-oriented debt-to-equity swap by AECC Aviation Power Co is evaluated from four dimensions:market response,financial effect,enterprise value and corporate governance.According to the research results,the market-based debt-to-equity swap has achieved a good market response,improved the financial situation,had a positive effect on the increase of enterprise value,and improved the corporate governance issues.The purpose of deleveraging has been basically completed,and relatively ideal results have been achieved in the short term,but the effect is not obvious in the long term.Finally,it summarizes the enlightenment brought by the market-oriented debt-to-equity swap of the AECC Aviation Power Co,and and make suggestions for China’s current market-oriented debt-to-equity swap.Combined with the case analysis,the research conclusion of this paper is further drawn: the AECC Aviation Power Co has the rationality and necessity of implementing market-oriented debt-to-equity swap.the AECC Aviation Power Co implemented a market-oriented debt-to-equity swap has achieved the expected purpose;There are merits in the market-oriented debt-to-equity swap of the AECC Aviation Power Co.Based on previous case studies and combined with the background of deleveraging,this paper analyzes and evaluates the economic effects of market-oriented debt-to-equity swaps from multiple aspects,provides a reference for other enterprises to carry out market-oriented debt-to-equity swaps,and promotes the development of market-oriented debt-to-equity swaps in China to a certain extent.