The Application Of Redemption In Pe Investment

Private equity investment and investment institutions usually agreed with the company share repurchase terms. On one hand, it is a way for PE exit and on the other hand avoid the uncertainty caused by asymmetric information. The right to compulsory foreclosure, but forced foreclosure is not a legal term. Therefore, this paper used the redemption of the repurchase of the company or in the investment agreement.In the practice of China’s corporate law, private equity repurchase shares in the company investment institutions always due to damage the interests of shareholders and creditors of these reasons is not applicable. This paper makes detailed analysis for the company to repurchase would not affect the company, shareholders and creditors.In this paper, a total of twenty thousand words, is divided into four chapters.The author enumerates two related cases, and expounds the theoretical basis of stock repurchase.Secondly, the author analyzes the company shares redemption investment institutions in the legal conflict, and dismissed one one.Firstly, the company can not become their own shareholders based on the view of this point is a legal realism of derivatives, two of China’s regulations of the company holding its own shares in the cancellation within ten days and have no right to vote and the right to receive dividends.Secondly, according to the point of view of conflict with the principle of equality of shareholders, the author proves the company law of the People’s Republic of China does not prohibit the issuance of stocks category, that as long as the investment institutions in the capital to the relevant agreement without the use of dominance signed unequal terms, introduced when the shareholders will not big shareholders abuse of rights, it would not be in violation of the principle of equality of shareholders.Thirdly, consideration of the interests of creditors of the threat, the author demonstrates the due to the gradual relaxation of the principle of capital maintenance, capital reduction does not necessarily affect the protection of creditors, creditors and shareholders of the differential protection is limited liability risk transfer to no voting rights of creditors; investment institutions as a category shareholders protection should not completely consistent with that of the protection of ordinary shareholders.Again, find out company redemption investment institutions shares in China’s company law can be applicable reduction path, but capital specified path is quite simple and cost cost is higher. It is suggested that China should refer to the capital classification system in Germany, the implementation of "situation + the generality of the legislative authorization pattern" type.Finally, due to the author’s knowledge is shallow, for the investment institutions dozens of times of capital premium whether in the game with its creditors can add more advantage, our country whether to creditors excessive protection and not thinking out the conclusion. At the same time, the establishment of specific repurchase system, to repurchase sources and prices, there are others too.