Research On The Implementation Effect Of Market-Oriented Debt-to-Equity Swap Of Hangfa Power

Under the "triple pressure" of my country’s economic situation,the debt ratio of state-owned enterprises is still facing greater upward pressure.Ensuring that the leverage ratio is stable with some decline,and maintaining the bottom line of no major debt risks are issues that are still important to the further reform and development of state-owned enterprises.In the context of supply-side structural reform and the "three eliminations and one reduction" policy to promote industrial upgrading,in order to implement the policy requirements of reducing leverage and relieve the debt crisis in the accelerated transformation of the industrial structure,market-based debt-to-equity swaps have become corporate debt.The new means of restructuring can help reduce the debt burden of enterprises,while improving corporate governance,improving operation and management efficiency,and effectively helping to balance risk prevention and stable growth.This paper takes China Aviation Power Co.,Ltd.as the case study object.Firstly,it introduces the implementation background and industry characteristics,sorts out the content of the "two-step" debt-to-equity swap plan,and analyzes the market-oriented characteristics reflected in the participating entities,pricing mechanism,and exit arrangements.In the case analysis part,the motivation of the debt-to-equity swap and the risks in the implementation process are explored.It divides the path of the debt-to-equity swap that affects the value of the enterprise by stages,and uses the event research method and the financial indicator analysis method to analyze its effects from three dimensions: market response,financial performance,and corporate governance.The research conclusions drawn are:(1)The market reaction is positive,and the market value of Hangfa Power’s stock market will increase in the short term.(2)The debt-to-equity swap is in line with the market-oriented principle,and generally has produced good results.The solvency of Hangfa Power has been significantly enhanced,the operational and development capabilities have been improved,and the effect of improving profitability has been limited.(3)The equity structure of Hangfa Power tends to be diversified,and the debt-to-equity swap has created conditions for improving corporate governance and strengthening supervision,but it is still uncertain whether investment institutions can effectively participate in corporate strategic decision-making.(4)The market-oriented debt-to-equity swap should be combined with adjustment measures such as optimizing business management,improving internal control and risk prevention,etc.,in order to bring about more beneficial results.Finally,through the analysis of the risks and effects of the debt-to-equity swap program in practice,three inspirations are drawn that should be strictly screened for target companies,optimized post-investment management,and combined with corporate innovation and development.This article studies the participation of the central enterprise group in the debt-to-equity swap project of a listed company with a high debt ratio,and achieves complete control over the subsidiary while reducing debt.The market-oriented operation path of this case is reproducible to a certain extent,and the scope of application is expected to be further expanded in the future.It also enriches the content and paths of SOE reform.It provides valuable experience and inspiration for market entities who intend to use debt-to-equity swaps for rescue,and is of great significance for properly resolving debt risks,optimizing the structure of state-owned capital,and using financial market means to feed back the industrial economy.