Key Issues And Equity Value Of State-owned Water Enterprises Equity Transferring

With the continuous deep going of the marketization of public facilities, the transfer of state-owned stock right under franchise gradually becomes a main commercial operating mode in the marketization of domestic water supply. As such transfer of stock right involves both the large-scale flow of state-owned assets and the franchise of public products, and often is accompanied by the commercial merge by international capital; in particular,"water"as a kind of products involving the people's livelihood, is related to public interests and security, leading to very complecated operation of such transfer . At present, there have been not yet a comprehensive and all-round guideline or mandatary critaria to follow in our country, thus, caused that projects in different locations are adopting different practice and various problems are existing. In addition, many professionals in the water industry showed their serious worries about such transferring, considering contradictions, discrepancies and ambiguities among laws, regulations and policies really existed and binding each orther sometimes. In particular, recently foreign water supply operators have obtained and merge-bought in succession number of water projects in our country at prices greatly exceeding the evaluated value of net assets of water supply enterprises. These projects were triggered with big surprise and were deemed as"high premium".The main purpose of this study is to provide operating and practical instructions to the process of the marketization of water supply in the future. On the basis of carefully analyzing the process of the marketization of domestic and foreign water supply as well as current relevant domestic laws, regulations and policies, aiming at resolving problems that have been worried about in the industry and that existed in previous water supply projects. This research suggests several key points that shall be grasped in the transfer of state-owned stock right of water supply; in particular, this Article brings forward independent ideas about how to guarantee public security and public interests, realize state-owned controlling power, directe flow of benefits from such transfer, disposal the assets when the term expires and avoid the associate transactions, etc. Such ideas have been applied into practice in the project of the transfer of 49% of stated-owned stock right of Tianjin Shibei Water Supply Co., Ltd.; This Article independently creates a computation model for stock right value in the transfer of state-owned stock right, became the first domestic example to correctly calculate the stock right value of target company by using a model from the state-owned enterprise's perspective, and filled in the blank of previous domestic operating projects in such aspect. The successful model application to the project of the transfer of 49% of state-owned stock right of Tianjin Shibei Water Supply Co., Ltd., has laid a theory foundation for state-owned water supply enterprises to correctly recognize the stock right value.Furthermore, this article also indicates mistakes and misunderstandings about the interpretation of"high premium"through economic analysis on different concepts like asset, property right, stock right, enterprise value, merger price, etc.The project of the transfer of 49% of state-owned stock right of Tianjin Shibei Water Supply Co., Ltd. instructed by the research results mentioned in this Article has recently been highly praised in the examination and approval by the State's relevant ministries and committees, and is considered as a typical example instructing the further deepening of the water supply market within a period of time in the future.