Study On The Financing Of Management Buy-Out

Since management buy-out arose in Britain, it has been made great progress in other countries. The fact has shown that the management buy-out has active effects in reducing agency cost, motivating managers, improving the performance and so on. However, the management buy-out has a shorter history in China. It is certain to be faced with a lot of restricted factors. And, the financing problem is one of the key factors, which determines whether the management buy-out is successful or not. Based on a discussion of the concept, characters, basic theories and practical meaning of management buy-out, combining foreign and domestic experience of management buy-out, the author studies the financing problem of management buy-out in China, and then gives some feasible advice. The article is composed of six parts.Part 1: Introduction. This part states the background, oriention, methods, objectives and logical route.Part 2: Introduction of theories about management buy-out. In this part, the author summarizes the management buy-out's concept and characteristics, analyses the basic theories, and tells the practical significance of management buy-out in China.Part 3: The financing analysis of management buy-out in foreign countries. In this part, the author discusses and analyses the financing patterns, methods and tools used in management buy-out in foreign countries by summarizing the characteristics of four financing modes in Britain, United States, Russia and East Europe as well as Japan and diversified methods and tools such as the debt, right and mixture etc.Part 4: The financing analysis in management buy-out in China. In this part, based on the introduction of some cases, the author summarizes some main financing patterns and analyzes them briefly. Meanwhile, compared with foreign financing experience, the author points out some financing problems existing in Chinese experience.Part 5: Some suggestions in solving financing problems in Chinese management buy-out. The article points out that the solution of financing problems depends on two facts. On the one hand, we should foster and develop intermediate organization to offer enough finance and optimize financing structure. On the other hand, we should deregulate the financial control to provide wide financing space for management buy-out. Only if so is management buy-out's financing condition improved and management buy-out developed successfully.Part 6: The conclusion of the article.