Study On The Financing Way Of MBO In State-owned Enterprises Of Our Country

Management Buy-outs appeared in 970s and developed quickly in 1980s, which slowly becomes an global trend. MBO was firstly practised in China enterprises in the middle of 1990s. Many enterprises have practised MBO recently. The goal of MBO in China enterprises is to play active roles of MBO in such aspects as clearing state-owned enterprise property right, decreasing agency costs and making incentive to managers. But the practice of MBO exists many problems, such as unequal pricing, financing difficulty and incompletion of financial information, which seriously influence on playing roles and normal development of MBO. Financing problem is one of the key problems. The paper studies the financing way of MBO in State-owned enterprises of China by comparison and firstly puts forward the "mortgage loan of the value of entrepreneur insurance contract"financing way, which provide an effective way to solve the financing problem of MBO in China state-owned enterprises. The first chapter introduces the meaning and the related theories and the background of MBO to understand the whole face of MBO. The next chapter introduces the financing way of MBO in the west countries in order to supply the example to our country. The third chapter studies the background and the meaning and the financing problem of MBO in state-owned enterprises of China. Study shows that it is necessary and urgent for China to design new financing way. The fourth chapter puts forward the financing way that is fit for our country-"mortgage loan of the value of entrepreneur insurance contract"financing way and studies the meaning, the base of theory, the hypothesis, the significance and the further problems.