Research On Motivation And Financial Effect Of Private Placement In Listed Companies

Since the reform and opening up,with the rapid operation of capital in the world,China’s listed enterprises are constantly seeking faster and lower cost financing.Among many financing methods,private placement is favored by listed companies,compared with allotment of shares and public offering,and has gradually become the preferred way for enterprises to refinance,because of its high approval success rate,short audit time,no limit on profitability and low issuance cost.Enterprises choose the type of private placement according to different motivations to achieve their own goals,which will also cause different financial effects.At present,the research and practice of private placement in China is limited to the wealth effect of shareholders,stock price effect and announcement effect.Therefore,this paper chooses the financial effect as the starting point of research on private placement.This paper adopts the research method combining theory and case to analyze the motivation of private placement and the financial effect brought by it.In the theoretical part,this paper summarizes four main types of private placement.According to the relevant theory,this paper analyzes the motivation of private placement and the financial effect caused by private placement.In the case section,this paper chooses the asset-injection private placement implemented by Tongde chemical company in2013.Therefore,from the perspective of the trading subject,this paper collects data and collates data from the annual reports and announcements of Tongde chemical company over the years,and analyzes the financial effect of the enterprise from the three aspects of market response,financial capability and financial quality.In the analysis of the market reaction,this paper compares short-term excess return and stock value,which proves that the market had a strong reaction to the private placement of Tongde chemical company,and the private placement of Tongde chemical company had received the positive effect of the market.In the analysis of the financial capacity of listed companies,this paper focuses on the ability to resist risks,solvency,profitability and operational capacity,and deeply analyzes the impact of private placement on the financial capacity of Tongde chemical company.The analysis results show that the enterprise’s financial ability was enhanced.From the financial quality analysis of the underlying assets,it can be seen that after the injection of the underlying assets into the listed company,the industry competition was eliminated,and the operation synergy effect was generated.The acquired company had implanted advanced management experience for the acquired company,which had enhanced the market competitiveness,and improved the quality of profit and cash flow.The research results show that the asset injection private placement of Tongde chemical company was successful and brought good financial effect to the listed companies.Finally,the experience of carrying out private placement refinancing is summarized to bring some enlightenment to the listed enterprises planning to carry out private placement.