A Study Of Financing Activities After Mergers Of Listed Companies--Based On Samples Of Year 2000

Being the backbone elements of Chinese capital market, listed companies own a lot of advantages in the economic activities. The advantage of financing platform is one of them. For those non-listed companies, especially private owned companies and medium and small-sized companies, it is a feasible way to solve the capital problem by controlling listed companies and making use of their financing platforms.In this paper, we observe the A-share companies listed in Shanghai and Shenzhen who had m&a activities in 2000. Furthermore, according to certain qualifications, we take 42 listed companies of them as our sample companies. We make a thorough analysis to their financing activities after m&a. In the process of analyzing, we focus our efforts on the issues including: whether financing demand is one of main m&a motives, what about the effect of financing activities after m&a, and the problems occurred in the financing activities after m&a. For the issue of whether financing demand is one of main m&a motives, on the one hand, we make statistical analysis to our sample companies by observing their financing activities, on the other hand, we discuss the issue combined with the fact of financing difficulty to non-listed companies. For the issue of the effect of financing activities after m&a, we make analysis from two aspects. The first part is about equity financing. We sort out those sample companies who had rights issue or placement and observe their capital schedule, project alteration, and benefits earning. In this way, we make direct evaluation to their financing effects. The second part is about the evaluation to general financing effect including both equity financing and debt financing. Since we cannot find a feasible way to make direct evaluation, we try to evaluate indirectly by comparing the performance change after m&a based on the fact that financing effect is positive relative to operation performance. Moreover, when doing data analysis, we try to make explanation combined with features of m&a, including the profit and loss situation before m&a, industry change after m&a, and business nature of new big shareholder.By theoretical and statistical analysis, we draw the following conclusions: Financing demand is one of main m&a motives to control listed companies. Financing is also an effective way to enhance performance after m&a. The status of being listed means wider financing channels and more financing convenience. The new big shareholder always makes good use of the financing platform after m&a. Equity financing is a preferable way. At the same time, both short-term and long-term loans from banks increase obviously. There are not bond financing in the sample companies after their m&a. The general financing effect is positive although there are some problems in financing activities, including big shareholders' giving up right issue, connected transactions with raised capital, nonstandard behaviors in guaranty loans and stock pledge loans. All these noises challenge the companies' performance improvement and stability of stock rights and are also potential occasions for bad loans of banks.