The hottest state-owned enterprise deleveraging pa

2022-08-20
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Deleveraging path of state-owned enterprises: deal with zombie enterprises as a breakthrough, debt to equity swap will speed up

according to the Economic Information Daily recently learned from the SASAC, the next step for state-owned enterprises will set an example in controlling the scale of debt, reducing financial leverage, and further accelerate the pace of cleaning up "zombie enterprises". As an important part of the "deleveraging" reform of state-owned enterprises, the market-oriented debt to equity swap is also accelerating. Many state-owned enterprises have intensively signed debt to equity swap agreements with banks. With the continuous promotion of debt to equity swap, more debt to equity funds will be in place, helping enterprises deal with non-performing assets and reduce the debt burden

the fifth national financial work conference on July clearly proposed that reducing leverage of state-owned enterprises should be listed as the top priority to prevent financial risks in the future. Then, on July 19, the Party committee of the state owned assets supervision and Administration Commission of the State Council held a meeting to study and implement the spirit of the national financial work conference, pointing out that we should unswervingly reduce leverage and firmly grasp the "zombie enterprises" to deal with this "bull nose". The meeting believed that we should give full play to the financial advantage that the lowest dew point temperature actually reached by the industry is 5 ~ 7 ℃, promote the supply side structural reform of state-owned enterprises, support direct financing and market-oriented legal debt equity swap in the disposal of "zombie enterprises", and reduce the financing cost and leverage level of enterprises

Liaoling team of GF Securities pointed out in the research report that driven by policies, debt to equity swap, as an effective tool for deleveraging, is expected to accelerate the implementation at the micro level

the research report also believes that under the resonance of the dual policies of supply side reform and state-owned enterprise reform, "debt to equity swap + supply side reform should not only ensure the degree and lubrication of the table", the focus of supply side reform of coal and steel is gradually shifting from "de capacity" to "deleveraging", which is expected to become a key landing area of debt to equity swap; In terms of "debt to equity swap + mixed reform of state-owned enterprises", employee stock ownership is still in the pilot stage, and the introduction of war investment, equity incentives and other traditional mixed reform methods is slow, while market-oriented debt to equity swap is expected to open up a new mode of mixed reform

local governments responded quickly

after the meeting of the SASAC on July 19, recently, the SASAC of Guangdong Province and the Party committee of Hebei Province successively held a meeting to deploy the disposal of "zombie enterprises" in the province, with a pressing force of 20 to 30 kg

in the afternoon of July 20, Liu Xiaolong, deputy director of the state owned assets supervision and Administration Commission of Guangdong Province and member of the Party committee, and his party went to the provincial property rights trading group to investigate the progress of the liquidation of "zombie enterprises" and other related issues, emphasizing the need to accelerate the substantive liquidation and disposal of "zombie enterprises". The symposium focused on the construction of a clearing pilot through justice, arbitration, industry and commerce, capital markets, non standardization and other means, and the substantive clearing of 1634 "zombie enterprises" that have been entrusted

on July 22, the Hebei provincial Party committee held a (expanded) meeting of the Standing Committee, stressing the need to resolutely deal with "zombie enterprises" and comprehensively investigate and dispose of "zombie enterprises" in steel and other industries with overcapacity. Hebei Province should not only dispose of "zombie enterprises" in the steel industry, but also comprehensively investigate and dispose of "zombie enterprises" in other industries with overcapacity

high leverage is mainly concentrated in non-financial state-owned enterprises

data show that at present, China's high leverage is mainly concentrated in non-financial state-owned enterprises. According to the calculation of the Chinese Academy of Social Sciences, by the end of 2015, the leverage ratios of the financial sector, the residential sector, the government sector including local financing platforms and the non-financial enterprise sector were 21%, 40%, 57% and 156% respectively. According to other data, the debt of state-owned enterprises in China accounted for about 70% of the total debt of non-financial enterprises at the end of 2015. Therefore, deleveraging of state-owned enterprises has become the key link of financial deleveraging

"this means that there are structural problems in the debt of Chinese enterprises, and too much debt is concentrated in state-owned enterprises." A person from a central enterprise told the economic staff

another expert pointed out to the economic participant, "the debt ratio of state-owned enterprises is too high, which is harmful to the enterprises themselves and the whole real economy." When the profit margin is not high enough, the high debt ratio will hollowed out enterprises in the long run, and even lead to the early entry of the real economy into the era of industrial hollowing out. Zombie enterprises consume resources without output, and rely on credit funds for "blood transfusion" and "life renewal", which is the direct reason for the high debt ratio of state-owned enterprises

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