Pathways And Economic Consequences Of Cross-industry Transformation Through Asset Restructuring For Financially Distressed Companies Study

With the advent of the Internet era,traditional retail business enterprises have been strongly impacted by new retail businesses such as online sales under the prospect of the rapid development of Internet and logistics technology,and the transformation of traditional business enterprises is inevitable.Many commercial enterprises have transformed and upgraded their business models through the integration of "Internet+" and commerce.However,for some commercial enterprises that have not made the online transition in a timely manner,they are experiencing financial dilemmas.As an important means for enterprises to achieve cross-industry transformation,M&A and restructuring can play an important role in transforming and upgrading financially distressed enterprises through asset restructuring and optimising resource allocation.Through asset restructuring,financially distressed enterprises can enter new industries,obtain resources for development and get rid of their financial dilemmas.With the gradual prosperity and marketisation of China’s M&A market,M&A restructuring has increasingly become an important way for some financially struggling enterprises to escape.State-owned listed companies,in particular,are driven by the local government’s interest in developing the local economy and have a strong incentive to inject quality assets into financially distressed listed companies through asset restructuring in order to avoid the "delisting" of the already listed local state-owned companies.Thus,exploring the path of cross-industry transformation of financially distressed companies through asset restructuring and its effects,especially a summary of typical cases where financially distressed companies have been able to transform themselves out of financial distress across industries,are of great theoretical value and practical significance to enrich the theory of M&A and restructuring,corporate M&A and restructuring and cross-industry transformation.This thesis takes a listed traditional retail business enterprise,Tianjin Quanyechang,as a case study to explore the cross-industry transformation of a financially distressed enterprise through asset restructuring.Based on a review of the literature on the causes of financial distress and the motivations for corporate asset restructuring and cross-industry transformation,we set out the basic theory of corporate asset restructuring and cross-industry transformation.We also analyse the motives,pathways and economic consequences of cross-industry transformation through asset restructuring for financially distressed companies,using Tianjin Quanyechang,a traditional listed retail commercial enterprise,as an example.The study finds that when a financially distressed company finds it difficult to escape from its difficulties due to the internal and external environment of the industry it belongs to,entering a new industry through asset restructuring is an effective means for financially distressed companies to escape from their financial difficulties.As a state-controlled commercial listed company,Tianjin Quanyechang,due to the influence of industry competition,business management and other factors,four consecutive years of losses,and face the risk of "delisting",with the strong support of the effective controller Tianjin State-owned Assets Supervision and Administration Commission,through asset restructuring asset restructuring injection of high-quality assets,successfully to renewable energy industry With the support of the State-owned Assets Supervision and Administration Commission of Tianjin,the company successfully transformed into the renewable energy industry through asset restructuring and reorganisation,which enabled it to escape from its financial difficulties.This article analyses the motives for Tianjin Quanyechang’s cross-sector transformation,and analyses the effect of Tianjin Quanyechang’s cross-sector transformation,revealing the reasons for Jin persuasion’s cross-sector transformation out of financial difficulties.The contribution of this thesis is mainly in the following three points.First,the existing studies on asset restructuring mainly focus on empirical studies,while this thesis takes typical state-controlled listed companies as the research object and analyses the reasons and effects of financially distressed companies getting out of financial distress through asset restructuring,thus enriching the relevant studies on asset restructuring.Second,the existing studies on ST-listed companies escaping from financial distress to "save their shells" are mainly based on the earnings management and connected transactions of ST-listed companies.This study,on the other hand,explores the issue of "shell preservation" of ST-listed companies from the perspective of cross-industry M&A restructuring,thus complementing the relevant studies on "shell preservation" of ST-listed companies from financial distress.Third,this study selects state-owned holding companies as the research object to explore the problem of "shell preservation" of ST-listed companies by means of asset restructuring,which has certain reference value for deepening the reform of state-owned enterprises.