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"Debt" rational thinking

Author: ZhouWei From: www.yourpaper.net Posted: 2009-04-01 15:09:09 Read:
20 years of reform and opening up, the state-owned enterprises to use credit more than 70% of the entire country, more than 80% of the domestic labor can only provide GDP30% of output in enterprises with more than half of them at a loss floundered. A considerable number of people believe that the high debt ratio of state-owned enterprises so that enterprises become "working for the bank. The commercial banks also are not beneficiaries, although it can get all the considerable interest income, years of accumulated bad loans for doubtful debts, bad debts, an alarming number of annual bad debt reserve is far from sufficient to write off bad debts incurred, thus seriously affecting the normal operation of the Bank become a serious hazard to our financial risk. How to make the financial and economic fields, the two major problems of the rule, which is the focus of attention of all levels of government, the business community and the financial community. The introduction of the "Debt", seems to let people see hope.
Defuse financial risks, the state-owned three-year turnaround, however, rational understanding of the debt-equity swap is crucial. We noticed the debt-equity swap certain impact on banks, state-owned enterprises and assets of the company, but also through the surface layer is essentially a more realistic, more deeply understand and grasp the debt-equity swap.
(A) of the state-owned enterprises, debt is not just both eliminated debt, interest-free package, but the integration of the shareholder structure, focus on the future revenue initiatives
First, the debt-equity swap is not helping the poor, the companies must pay the price. At present, China's state-owned enterprises to raise financing channels, a single way, many local governments and businesses as to get rid of the debt burden, "Debt" to resolve the sources of credit funds is fairly common knowledge. In fact, this is a misunderstanding. Principles of economics, financing, the highest cost of equity financing. Because the proceeds of the share capital must be higher than the benefits of corporate liabilities. "Debt" to solve the corporate debt burden, reduce interest expense, increased working capital the target operating assets is smaller, costs and higher yields. Shareholders to participate in the distribution of income in the future, will enable enterprises to pay more expensive than the current loan interest costs. In this sense, the "Debt" consideration for the companies to pay a return on equity is higher than the simple consideration of the assumption of debt and interest. Meanwhile, in accordance with the rules of the market, if the poor debt-equity swap business, business is not strong constraints higher ownership percentage of shareholders --- Bank or the assets of the company the right to require the replacement of the operators, the right to dispose of the reorganization of assets, you can also adjusted operating decisions. Therefore, the "Debt" allow enterprises to get some time to recuperate while adding more pressure and responsibility, and also to the enterprise and its operators.
Second, the debt-equity swap requires enterprises to improve the structure of property rights, rather than the formal "restructuring". "Debt" to enable enterprises from current single structure of property rights, into a mixed structure of property rights for the common shares by a number of shareholders, co-managed enterprises. Such a structure of property rights clearly point to the establishment of a modern enterprise system, the establishment of a board of directors, board of supervisors, managers, the corporate governance structure of checks and balances, rather than a form of "restructuring". According to a statistics of the China Industrial and Commercial Bank, the last few years, many state-owned enterprises due to the capital verification audit lax or selling of specification restructuring has evasion ICBC debt amounted to 100 billion yuan. "Debt" will regulate the behavior of corporate restructuring, its foothold is to ensure that the state-owned enterprise, owned, financing assets increasing the value of. This is also a business management towards modernization.
Again, the positive significance of the "Debt" is to promote the liquidity of assets to obtain future income. Assets is still sluggish state is the biggest waste of the assets in the operating process. Activity characteristics of the assets, the owners and operators continue to explore activate the assets of the coup. "Debt" selected objects precisely to comply with state regulations, make an inventory of assets, including the five basic conditions ", such enterprises after the operation of the" Debt "with vigor and vitality, and made some economies of scale, financial asset management companies can make the asset listing, transfer and corporate repurchase equity in the form of further liquidity, so that the "Debt" policy effects are normal play. From this point of view that the ultimate goal of the "Debt" is consistent with the operational goals of the enterprise assets. (B) "Debt" on the banks, after the liquidation of non-performing assets, the key is to gain time to promote financial reform
Now, China's state-owned banks in the international credit rating is very low, mainly because of the banks there are a lot of non-performing assets. From this point of view, "Debt" First defuse financial risks for banks designed, not for the enterprise predicament introduced. While the formation of the banks' bad assets and loans of government intervention, repeated construction, Financialization of credit assets, poor credit environment induced similar banks on the international common problem, but too lax financial regulation, banking institutions overlap set too many staff, the cost of credit over Higher financial system reform lags behind say that more localized features.
"Debt" will enable the bank's assets become excellent international credit status rose, with the competition ability to avoid financial risks with the material basis. Other hand, debt 32 conversion of state-owned banks accumulated over the years, a huge amount of non-performing assets easily be transferred financial asset management companies, banks and managers will be easy deemed to be responsible for non-performing loans "amnesty". In the future, the bank's non-performing assets will occur, "Debt" policy is a long-term existence? Or expediency? Has been decided yet. In this case, the banking sector on the credit funds must adhere to sound risk prevention principle, to reduce the risk of excessive loan amount, eliminate all the hidden risk. The only way to take full advantage of the "Debt" a good opportunity to optimize the structure of credit assets, the necessary time for financial reform to win.
(C) for the company in terms of assets, the debt-equity swap is a kind of corporate behavior, must operate according to the rules of the market
, Financial asset management companies will undoubtedly act as one of the most crucial role in the debt-equity swap participants. Assets to the implementation of the operation of the debt-equity swap, easily recognized the concept of "national" or government action, in fact, the the assets company is also state-owned enterprises, its behavior is also a corporate behavior. Generally speaking, the assets of the company to undertake debt-equity swap business must be according to the rules of the market independent operation of, not only to an independent assessment of the disposal of assets, but also as an asset owners to participate in shareholder dividends. Its purpose is to activate the capital to prevent impaired bank assets, the loss of state assets. In the long term, the assets of the company should make an inventory of assets, so that the debt-equity swap enterprise to enter the capital market, it will be a new round of the laws of the market, a higher level of capital flows. But the current situation is the debt-equity swap into the assets are non-performing assets, part of the assets may be activated by the professional operation of the company's assets, another part may be unable to play effective dead accounts. Since the assets of the company is the intermediary bank non-performing assets and corporate debt conversion and bridge, then it enters the role must be fair and equitable market principle to the substance of the operation of the debt-equity swap.
First, we must reasonably peel, following the bank's non-performing assets. Not always follow the transfer of bad debts from banks at par and spent a more than two "loans, and depending on the maturity structure of the non-performing assets, business operations and effectiveness of different situations, at par, discount transfer, the enterprise all want cheap Renzhang the. Cheap discount part of the difference between the assets of the company's income to supplement their operating expenses. The benefits of such an approach is not yet fulfill the interests of a recycling responsibilities deductible fait accompli premise to recognize the loss of bank assets, non-performing assets in the banking. It enables banks and enterprises should transfer part of the interest on the issue tend to equal in the debt-equity swap.
Second, the use of a variety of business tools is in the range of favorable state franchise laws, policies, and the flexibility to dispose of assets. Such as the transfer of assets, reorganization to be measured based on the assets of the operation, income level, and choose the best option. Furthermore, the non-performing assets of the enterprise is mainly figurative materialized assets coexist with technology, higher activity of intangible assets such as patents, should give full play to the active role of intangible assets, and science and technology development, promote industrial upgrading.
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