A Case Study On Private Equity Of CM Limited Company

After the split share reform in 2006,the listed companies preferred the equity refinancing through the directional increase.The audit and issuance conditions of private equity are relatively loose compared with other equity refinancing.There is no requirement for corporate profitability and corporate dividends.Listed companies can flexibly arrange the issuance of objects.This paper mainly uses the method of case analysis,the CM special steel Limited by Share Ltd in 2012 and 2015 two announcement of planning a private equity refinancing are analyzed,respectively introduces the process and the directional resolution of two additional external environment,financial situation,the board of directors of the equity plan content.For the first time equity failure,mainly due to the overall industry profitability is poor,affect the company’s profitability,low operating income,raise funds investment in the project has many uncertain factors,such as project approval time,plant construction project time of uncertainty,no company law should change the time,investors in the company orientation the issuance of equity investment projects lack of confidence.At the same time,two level market stock prices continue to go down,large shareholders participate in private equity,opportunistic behavior with interest transmission,and affect the rights and interests of minority shareholders.In second private equity,two level of market valuation is relatively stable,the private equity share price is reasonable,the introduction of outside investors,reducing the impact on the interests of small shareholders,in addition,the strategic adjustment of the layout,profits in the real estate industry,enhance the company overall profit,raise funds for the repayment of bank loans,no uncertainty factors,make the company through a private equity to raise funds for the completion of the strategic transformation,improve production technology and production capacity,adjust the company’s capital structure,reduce the financial pressure.The case analysis of CM company from the issuance of two directional,directional selection on the additional financing of listed companies to sort out the conditions of private equity,proposes the influence factors of the external environment and industry status,the company raised its financial condition,capital investment project uncertainty affect the confidence of investors and two level of marketvaluation to damage the interests of small shareholders.Finally,through the case of CM limited company,we put forward some suggestions for the company shareholders and management to choose private equity and refinancing,and put forward some suggestions for regulators to better protect the capital market and investors.