A Case Study On HQ Group State-owned Equity To Swap

With the rapid development of Chinese economy and the further adjustment of economicstructure, the demand of enterprises to be bigger and stronger, and to achieve the optimizationof resource allocation are growing, followed by increasingly frequent actions of mergers andacquisitions (M&A). Compared with direct mergers, acquisitions and capital increase, thebiggest feature of equity swap which involves fewer cash transactions, the less tax burden andeasy to revitalize assets undoubtedly is one of the best options. Although there are a lotof theories and empirical research on domestic M&A, it lacks in-depth research onstate-owned equity swap. Along with the advancement of the reform of state-ownedenterprises and optimization of the industrial layout, equity swap will be one of the effectivesolutions of the realization of state-owned assets flow, integration of resources.This article takes the case of state-owned equity swap of HQ group as an researchobject, to analyze and discuss the problems and solutions existing in the equity swap from thebackground, project design, negotiation process, supervision and approval on state-ownedassets, information disclosure and other aspects. Equity swap is different from equitytransfer. The related trade structure and approval process is especially complicated.Therefore, this article analyzes and demonstrates the motivation and significance of equityswap in detail from the motivation, legal, asset appraisal, tax, risk factors, the strategicsignificance asset integration effect aspects. It demonstrates that equity swap has theadvantages on obtaining quality assets and it can achieve tax-saving.This article further clarify the function of equity swap has a broad applicationspacewhich promotes securitization of state-owned capital and make the adjustment andcombination of stock of assets. Under the condition of no incremental accumulation,adjusting and optimizing configuration of the state-owned assets through revitalizing thestock of assets and enhancing the liquidity of the assets, by, can effectively achieve the valueof state-owned assets. And, of course, the state-owned equity swap has certain innovative,therefore, it encountered new problems in the process of operation. This article also pointsout some disadvantages of the implementation process and results. Hopefully it can providecertain reference for the equity swap and revitalize the precipitation of state-owned assets.