Management Buyout Financing Problem

MBO is abbreviation of Management Buy-out. It's the action that management use loan capital to purchase company stock (it must be reality stock, not stock option), thus changed the ownership structure, control power structure and assets structure of our company, and then achieve the goal of recombining this company, obtains the prospective earnings. In the western countries, MBO has been developed for nearly 20 years, the fact has shown, it can link up the development of the company and administration and supervision authorities' interests closely, thus it get encourage inside people enthusiasm to get up to a certain extent, it act for reducing cost, improving the function in such respects as enterprise's management state, etc.In recent years, a large amount of instances about MBO have appeared too in our country, a kind of relatively effective form reformed as enterprise's property relations, MBO offered an effective way in " owner's omission " of state-owned enterprise, and the state-run capital withdrawn from competitiveness field progressively, And " financing " is playing an important role to the implementation of MBO. MBO's financing course involved two issue of mainly to arrange, first, financing channel, second, financing way. In the course of real operation, because purchase the value marked is far beyond the solvency, which is offered by the management, outside financing of, most financial needs. In fact just because junk bond, secondary debt, mixing such production of financial instruments as financing, etc., harmony that MBO create terms and realize possible for foreign countries. And because of that the financial institution offering financing for MBO obtained incomes and undertook the risk, it become an important ring in financial market mechanism. So, no matter from the micro level of the target enterprise purchaser, or see from the macroscopic perspective of a national banking system, financing is all cores of MBO. This text is just based on above-mentioned thoughts, through the research discussion to MBO financing way in our country MBO course, survey domestic and international MBO financing situation, announce the current situation in our country of MBO financing and administration countermeasure to itstheoretically. This article is divided into four parts, explains the concept of MBO and implements the reality of MBO and theoretical foundation in our country in the first part. Second part introduced the financing experience of foreign MBO. The third part analyzed the subject matter and danger existing in MBO financing at present in our country. The fourth part is direct against the question that our country exists in MBO at present, propose the way to expand MBO financing channel of our country effectively.