| This research focuses on the role investment bank plays in the asset restructuring in a transition economy.This paper consists of seven sections. The first section summarizes the background on investment bank. How to deal with the assets, which are not in good conditions, is a serious problem for all kinds of firms and government. From the experiences of developed countries, we know that some financial institutions are necessary to keep things going on smoothly. Among the financial instruments, investment bank is designed to solve the problems related to assets of firms, especially those bad ones. Unfortunately, the Chinese financial markets are still under developing. Government regulates the interest rates, and restricts the innovation of finance, therefore investment bank is still an infant in the economy. Because it can help firms to solve asset restructuring problems, investment bank has been enjoying a high growth since the middle of 1990s. We believe firmly that the future of investment bank will be brilliant.In the second section first I put forth the concept of investment bank, then describe its functions and its business framework. After discussing a very important concept in this paper-"assets restructuring", I analyze asset restructuring and enterprise restructuring, and conclude that they are two different but related concepts. In the end, I make it clear that what is the application of assets restructuring of enterprise. While discussing investment bank, we compare it with commercial banks, and conclude that investment bank has a more important role than commercial bank. The business activities of investment bank can be sorted into three categories: preliminary sanctions, innovation activities and auxiliary activities. At the end of this section I give some information about the status of investment bank in China.The third section of this paper focuses on the forms of assets restructuring and the ways in which investment bank involves. There are three ways for enterprise to asset restructuring: expanding merging, adjusting merging and merging for control rights. In general, there are four ways by which the investment bank making cooperation with the firms whose assets need to rearranged. They are: (1) transferring the shares of an enterprise; (2) assets exchanging; (3) corporation takeover and merging; (4) merger and acquisition in the second-market. At the end of this section I summarize the functions of merging, which include: improving firm's financial situations; improving the market share; diversifying business; getting rid of bad assets; improving the competiveness of enterprise and reducing taxes, and so on.In the forth section, I discuss the roles of investment bank has played in the process of assets restructuring of enterprise. First I talk about the roles in general, such as what investment bank can do in carrying out strategies of rearrangement, functioning in capital markets, constructing modern institutions of firm, dealing with equity and debt, and in the constructing a group of enterprise. Then, I discuss the roles in detail. By comparing the roles played by Non-Listed company in stock exchange and Listed company in stock exchange, I realize the importance of investment bank on the assets rearrangement. Also, I point out that the capital market is the base on which investment bank carry out its business. The reason is simple. One of the ways in which investment bank rearranges the assets is to rearrange the stock shares of specific company, and to do so: the investment bank has to rely on the capital market.The fifth section is case study. First 1 analyze a case on China Huayuan Group. By describingthe process of China Huayuan Group becoming a public company, I discuss the process from the positioning of this group, business framework design till its stock shares issue, and demonstrate the roles of investment bank in asset rearrangement. Also, I introduce another case, about Gangyun Co., Lt. In this case I discuss the techniques of assets arrangement, and introduce... |
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