Study On LBO Financing

With the continuous development of China’s capital market and perfect, all these years, mergers and acquisitions and hyperactivity among enterprises is also increasing, to promote the development of non conventional enterprises large enterprises by way of capital operation. In this process, produced a new way of leveraged buyouts, mergers and acquisitions--. These years, because of its rapid development momentum shock theory, the financial sector and the business community of scholars and experts, they gradually began to study it.From a practical point of view, there are many obstacles of leveraged buyouts in the extensive development of our country need to be overcome, for those who have implemented a leveraged buy-out in specific enterprise operation also appeared more or less problems. What a leveraged buy-out, in the development of China’s capital market, the leveraged buyout of any help, for the reform of enterprise system, it has realistic meaning in our country at the present stage, there are factors which restrict the development of leveraged buyouts, and how can we solve the leveraged buyout financing difficult problem, to study these problems well we need to solve them, finally. Therefore, leveraged buyouts in China’s development present situation, and the necessity of the development in our country, all of these are worthy of our study.In these studies, the research priority among priorities in the process of the leveraged buyout financing, it directly determines the success or failure of the leveraged buyout. Therefore, enterprises in the leveraged buyout, select the appropriate mode of financing is the enterprise should pay close attention to the problem.This paper first describes the research status at home and abroad of leveraged buyouts, based on domestic and foreign research, a detailed description of the related theory of leveraged buyouts. This paper mainly introduces the concept of the leveraged buyout, the specific operation process, its development course, classification and characteristics as well as leveraged buy outs, and then the necessity of the introduction of leveraged buy outs are expounded, then the description of the current financing situation, and then analyzes several commonly used enterprise leveraged buyout financing, such as bank loan financing and the issuance of debt financing, the issuance of stocks and convertible merger financing, the issuance of convertible bond financing, through the analysis of these methods, and finds out some problems existing in the financing, combined with the relevant law has carried on the analysis to the causes of these problems. Finally, put forward some suggestions to improve the mode of financing, including the establishment of a sound legal system, improve laws and regulations; strengthening financial innovation, abundant financing instruments; the development of the capital market; improve the bank corporate governance mechanism. In addition, some of the more innovative ways of financing is put forward; using the seller financing, combined with the seller and the buyer financing.With the domestic research on leveraged buy outs has been continuously enriched and improved, the leveraged buyout that was popular in the developed countries in Europe and America mergers and acquisitions, will play its role in the economic development Chinese.