The Research On China's MBO Financing Problems

MBO is the abbreviation for Management Buy-out, which refers to the acquirement of the shares of a company by its management using financing funds for the purpose of changing the company's ownership structure, control power structure and asset structure, thereby restructuring the company and obtaining expected returns. It is proved that MBO has a positive effect on deceasing agent cost, motivating the enthusiasm of management, adjusting financial structure effectively and promoting the benefit of enterprises. In China, MBO has sprung up in recent years, which has been taken highly consideration as a valid way of strategic restructure of state-owned enterprises and state-owned capital retreating from competitive fields. In the process of operation, however, many restrictions, such as the constraint of correlative laws and regulations, the immaturity of capital market and the lack of support of national policy, have brought pressure to bear on the management who can only rely on the limited financing methods. Some management takes alternative ways, even the ways violating laws and regulations, which will certainly bring about potential danger to the development of the enterprise and the stability of society. Therefore, this thesis just discusses China's MBO from financial perspective and makes suggestions to perfect China's MBO financing, through the study on the financing modes in foreign countries and the current financing situations in China.The thesis is divided into four parts as follows:The first part is about the summarization of MBO. This part states briefly the conception, development, theories and procedure of MBO, so as to lay a theoretical foundation for latter parts.The second part introduces the financing experience of foreign MBO. This part states systemically the major MBO financing methods in foreign countries and analyzes their typical financing modes, followed by introducing a successful MBO case in England, for China's reference.The third part analyzes the current MBO financing situations in China. Based on the brief introduction of the circumstances of China's MBO, this part analyzes the reasons of financing difficulties and related risks in China, summarizes and states the general financing methods used in China's MBO.The fourth part gives some advice to perfect China's MBO financing. Following...