Applying Of Convertible Bond On Lessening Of State-owned Share Holding

For ages, rigid share holding structure is the character of Chinese listed companies. High concentration and illiquidity of state-owned share right and small proportion of tradable public shares, the absence of effective share-holder of state-owned shares bring severe corporate governance problems. Though high concentration and illiquidity of state-owned share right has the important function of avoiding state-owned assets losing, it has been the system root of sticking points of Chinese stock market, preventing the development of capital market, which is been scolded by scholars and investors. Researches show that, the only way to building well-functioned corporate governance and solving the problems of stock market is lessening of state-owned share holding.Since the thought proposed, the measures carrying on by government are opposed by market investors who worry about that the steps will hurt their interests. Evidence show that, whether design a well-functioned method is the critical step of lessening course. Zero coupon repurchase convertible bond can resolve the question. Being a innovation of convertible bond, the appearance of zero coupon repurchase convertible bond not only helps the lessening of state-owned share holding, slows the impacts on securities market, but also promotes the development of capital market, diversifies financial tools.By the analysis of the characters of convertible bond and questions met in the lessening course, this paper puts forward the applying of zero coupon repurchase convertible bond is a good method solving lessening of state-owned share holding. With the discussion of circumstance, characters of Chinese stock market, this paper also indicates the problems need resolved quickly in law, market condition of zero coupon repurchase convertible bond. This paper consists of 4 chapters. The first chapter systematically introduces the implications, characters, developments in overseas and local market of convertible bond. The second chapter deeply researches the necessity of lessening of state-owned share holding, on the base of remark and compare of differentlessening methods, supposes the applying of zero coupon repurchase convertible bond on lessening. The third chapter designs the steps and bond articles, deeply states the characters and functions of zero coupon repurchase convertible bond on optimizing corporate governance. The fourth chapter puts more attentions on question of developing zero coupon repurchase convertible bond. This paper mainly analyses the feasibility of resolving lessening state-owned-state share holding by issuing zero coupon repurchase convertible bond, thereby rational suggestion of lessening method and securities development is confirmed.