Analysis of the Restructuring of Huishan Dairy's Debt

Abstract

On 24 March 2017, the "black swan" incident of Huishan Dairy broke out and its share price dropped by 90% overnight. Since then, it has been in a serious debt crisis and its development has come to a standstill. Besides, it has sought to restructure itself several times over the years to get a new lease of life. The sequence of events is as follows: poor management of the company, debt crisis, share price collapse, suspension of the company, repeated debt restructuring and finally successful restructuring. To date, in November 2021, just over a year ago, according to the official website of Yuexiu Huishan Dairy, the dairy is in the IPO listing stage. This article focuses on the process and procedures of restructuring Huishan Dairy's debt, analyzing the situation before and after the restructuring based on financial and market data, assessing the success or otherwise of the restructured Huishan Dairy, which still has a "dominant share", sufficient "cash flow", and an over-invested "upstream industry". The problem of excessive investment in the "upstream industry" was resolved, and the "strategic layout" was clear and feasible. Based on the past and potential problems of Huishan, and considering the new situation and the advantages of its own development, the company has proposed some inspirations for the restructuring of the industry and the corresponding development suggestions.