| As the economic reforms deepens, marketing economy system improves and the function of government transforms, the state owned assets has gradually quitted from the general competitive industries. In the past twenty years, through the reform, the state owned enterprises has successfully solved the issues on short-term incentives. Yet the issues on long-term incentives and the selection of operators remain unsolved. The issue of property right must dominate the major concerns. In lack of a certain proprietor, property constraint is weakened, which result in a severe problem on agent relationship. Therefore, it is crucial to alter the state’s role as a proprietor through the withdrawal of state-owned assets by effectuating a reform on the property system. In that case, property right will function as a constraint to a large extent.Management buy-out, MBO in short, is a specific method of merging and acquisition emerging and developing in the United States in1970s, under the certain historical and market backgrounds. It is a form of leveraged buyout where a company’s existing managers acquire a large part or all of the company from either the parent company or from the private owners. As a brand new form of acquisition and a unique reform method, MBO has been widely adopted in the state-owned enterprises in China, which, undoubtedly, has a positive influence in the property right, management efficiency and the agency cost. It is a significant and worthwhile exploration and innovation and has attracted attention from all walks of life. However, as is in the primitive stage, the management buyouts of our domestic companies are irregular on both the policy and the system. As a result, obstacles and disputes coexist in the crucial parts including designing, pricing, financing, employers settling, etc, which is essential to the fulfillment of MBO.Taking the Nanjing Confucius Temple Tourism Development Co., Ltd as an example, this essay has researched and analyzed the operation of MBO. Then solutions are put forward to solve the problems and appraisals are processed to the effect of MBO. Finally, suggestions are provided from three specific aspects:shareholding structures, property flaws as well as financing issues, which serves the company’s sustainable development.The essay is divided into five parts.The first chapter, with a general introduction of MBO from some perspectives, say the definition, origin and the development in China, firstly revealed that MBO has been widely adopted by many state-owned enterprises in China. Then, discussion on the basic requirements of MBO is carried out through the theories of principal-agency, cooperative governance and human capital. In the end, it is concluded that MBO will cut down the agent cost, enhance the efficiency and solve the issues of long-term incentives. This positive influence correspondently accounts for the actions taken by the Nanjing Confucius Temple Tourism Development Co., Ltd.The second chapter illustrated the basic situations of Nanjing Confucius Temple Tourism Development Co.Ltd at first. Then the issues in the operation are brought forward and the background of the reform is analyzed. With the impetus from the government and the company itself, it initiates MBO in2003.At last the motivations of MBO in Nanjing Confucius Temple Tourism Development Co., Ltd are discussed. The practice of MBO in the case is illustrated in Chapter Three, including the participants, the whole plan and the flow of the process. The difficulties in the practice are emphasized. After that, solutions has been proposed in combination with the law and regulations, market features and the author’s own experience.Chapter Four recommends some specific schemes on how to conquer the difficulties. The author holds that the MBO of Nanjing Confucius Temple Tourism Development Co., Ltd. is a successful attempt, doing good to government, managers and the employees. Some sessions, however, still calls for improvement. After the acquisition, only the market will tell the problems on the shareholding structures, property flaws and the financing part.In the fifth part, it introduced the revelations got from the experience of MBO of Nanjing Confucius Temple Tourism Development Co., Ltd. Combine the revelations with the existing problems in state-owned enterprises, the author proposed the corresponding countermeasures.The conclusions comes the last. It can be concluded that MBO is undoubtedly a good and feasible alternative on the condition that the state-owned capital is withdrawn from the competitive industry. In the future, in the normative market environment, MBO will gain the ultimate success as long as operated under the protection of the laws and regulations. |
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