The Research Of The Difficulty And Solution For MBO In State-Owned Enterprise

Management buy-out (MBO) is the behavior that the managers of target enterprise own company's shares or other assets by financing, further gain or anticipate to gain the masterdom of the enterprise. As an important purchase manner, it has distinctive effects in integrating enterprise, reducing agent costs, strengthening manage administration and optimizing the allocation of social resources. Thus, it fully developed in western countries and rapidly around all over the world. The purpose of introducing MBO by our country is to find a way for the remove of state-owned assets and manager incentive mechanism. To some extent, MBO make the manager as well as the owner of the enterprise, thus it can solve the primary problem of state-owned enterprise, that is the owner absent. It's a pity that, some problems have appeared while MBO being practiced in China, such as the loss of state-owned assets.Thus, MBO has suffered from all kinds of challenges. Also, the policies on MBO have been changing repeatedly. Based on this backgrounds, this paper devoted to clear away the misunderstandings on MBO, fully analyzes that the problems is arise not from MBO itself, but the mixed results of political system, economy and finance environment, policy and law of our country. Further, while firmly affirming rationality of MBO as a manner of state-owned enterprise's property rights reform, it devoted to solve the MBO difficulties and improve the MBO system, with hope to apply it in serving the state-owned enterprise reform and the development of china economy better. The paper consists of six chapters, and the main body is chapter three to six. Chapter One: Speculate on The System of MBO. This part accounts for the concept and features of MBO, its development in foreign countries and its theoretical basis. The goal of this part is to summarize the advantages and disadvantages of MBO, the political, economic, policy and law conditions for MBO, thus we can borrow and apply it better.Chapter Two: Practice of MBO in China. This part arranges the development of MBO in China. Fully analyses the unreasonable challenges to MBO, explains local value of MBO, and comment on the viewpoint that the system of professional manager can replaces the state-owned enterprise property rights reform right in serving the difficulties of the state-owned enterprise, aiming to affirm the rationality of MBO as a manner of state-owned enterprise's property rights reform.Chapter Three: Research On The Legal System Concerning MBO Subjects. This part includes three points: it is unreasonable to exclude large state-owned enterprises and the listed companies form target enterprise; analyses law obstacles on the purchaser and how to improve the " Shell company purchaser" model; based on the point that State-owned Assets Supervision and Administration Commission of the State Council must to be supervisor , we must consider who can act as negotiator.Chapter Four: MBO Financing Plight and Solution. This part analyses financing plights at present, such as limited Financing channels, irregular financing behaviors, illegal information disclosure, and so on. and then raises the solution Including the meaning of the new Company Law and Securities Law to financing, the feasibility for the loan that required a pledge of Stock right, essentials for Cultivating the investment bank, finance implement innovation and the improvement of remove mechanism for financing.Chapter Five: The Structure of Pricing Mechanism. This part analyses the causes and drawbacks of the pricing mechanism that is, considers net Assets as Unique Standard and decides the price essentially by one party. The reasonable pricing mechanism must be like this: firstly, forms a basic price by cash flow discount method, and then disclosed in the market, fixes the final price by the procedure of "evaluation of bids". Otherwise, this part concerns related factors of pricing, such as compensations for manager contribution , the premium of masterdom, estimation of intangible assets and the laws and policies gauge on pricing problem.Chapter Six: The Risks and Preventions Mechanism after The Accomplishment of MBO. That this part is mainly an exploring thinking of the risk and supervision after the accomplishment of MBO, including the improvements of company governing and, the period of share holding, the relieve approaches of small and medium shareholder. The study on this field is relatively deficient at present, especially in science of law field. Thus, the author's purpose is to arouse related scholars to promote the level of research in this field.Limited by ability, this paper is fundamentally based on existing researches by the scholars in this field. As to innovation, if it is, may be the systemic analysis of the unreasonable challenges to MBO, and the benefits of the latest laws and policies backgrounds for MBO, such as new company law and securities law's amendments and the non-tradable shares reform, and so on.