Research On M&A Financing Risk Management Of Hainan Airlines Co.,Ltd

With the continuous improvement of capital market and financial system, China’s M&A market show rapid development. The expansion of M&A scale and scope directly drive the increase of M&A financing needs. In M&A trading, the main bottleneck buyout firms face is financing problem. Financing activity is an important part in the process of M&A, where exists a variety of risk factors. Simultaneously, the management experience of M&A financing of buyout firms are not sufficient, and related financing risk safeguard measures of the capital market are incomplete. The M&A financing risks have significant effect on M&A financing process and M&A activity. Therefore, improving the management ability of buyout firms’ financing risks becomes a necessary and important topic.The paper taking M&A financing case of Hainan Airlines Co., Ltd as the study carrier arranges and introduces the related theory of M&A financing risk management, and expounds the meaning and incentive of M&A financing, and defines M&A financing risks according to the process of M&A financing, and describes the M&A financing risk management theory. These provide the corresponding theoretical basis for the following case analysis of Hainan airlines M&A financing. Based on the relevant theory of M&A financing risk management, the paper analyzes Hainan airlines M&A financing activities, and adopts risk identification method of qualitative and quantitative combination to identify the M&A financing risk of Hainan airlines which include the risk of decision-making stage before the M&A financing, the risk of sustainability in the process of M&A financing and the risk of operation stage after the M&A financing. Then it uses the F-score model to evaluate the overall level of M&A financing risk in Hainan airlines. Based on the above the recognition and assessment of Hainan airlines M&A financing risk, the paper puts forward targeted control measures and suggestions for M&A financing risk of Hainan airlines according to the theory of risk management process from each phase of M&A financing.The paper recognizes and evaluates the M&A financing risk of Hainan Airlines according to risk management process, and puts forward risk control measures from different phase. It has certain reference significance to the M&A financing risk management of Hainan Airlines. In the meantime, it can enhance the understanding of finance risk management and provide practical reference for China’s buyout firms.