Economic Consequences Of Private Placement Introducing Foreign Investors

With the continuous development of the capital market, the refinancing of listedcompanies are more and more diversified, by placement to placement, and then moreand more companies private placement. In particular, the successful completion of thesplit shares structure reform in2006to promote the of revival China’s securitiesmarket to create the conditions for the promotion of the private placement. Privateplacement to raise funds relative to the advantage of other means of financing to meetthe capital requirements of the company, but also can achieve the injection of assets,asset restructuring and the introduction of domestic and foreign investors and otherpurposes. With the in-depth development of economic globalization and China’sshareholding reform, the need for the introduction of investors, how to introduce theinvestors as well as the introduction of investors whether it is conducive to thelong-term development of listed companies has become common to consider the issueof China’s government and enterprises. After years of development, domestic scholarson China’s A-share market in all aspects of the private placement have involved.However, due to the time span of less than private placement regime in China carriedout late, research data, the sample size less than normal, the findings remains to betested. The same time, most scholars tend to private placement in general, lessin-depth, comprehensive studies for a certain type of private placement, and fewstudies are analyzed from a private placement of listed companies of manufacturingthe economic consequences of the introduction of foreign investors has not been madesystematically studied. Based on this background, through case studies to explore theintroduction of foreign investors private placement of the full impact of China’smanufacturing listed companies, drawn from research findings and other listed equityrefinancing of the Company as well as the introduction of overseas listed companiesin China investors to provide reference and basis for guiding.This article features is the use of the case study method, and system ofmanufacturing listed companies-Jading Cement private placement to the wholeprocess of the introduction of foreign investors, and economic consequencescompared before and after the private placement, and finally arrive at the conclusion of the study. This successful private placement provided a reference model forChinese enterprises to achieve leapfrog development.Firstly, the article describes the private placement, the introduction of foreigninvestors as well as the economic consequences of the theory, and describesreferenced in this case Jidong Cement private placement. On this basis, the paperfrom the corporate governance structure, results of operations, the company’sinvestment, financing, dividend, and the stock market short-term response to analyzethe full impact of the private placement of the introduction of foreign investors in thecompany. By contrast, analysis of: Jidong Cement private placement to theintroduction of foreign investors to improve the company’s governance structure,improve the company’s results of operations, after the private placement the JidongCement financing, investment and dividend distribution have been good improvement.From the private placement of short-term stock market reaction, the positive excessreturns, the market for the Jidong Cement directed issuance supportive, has beenrecognized by the market.