Research On The Design Of Equity Investment Scheme Of An Urban Water Project

In order to carry out the scientific concept of development,accelerate the transformation of economic development mode and structural adjustment,improve the benefit and quality of development,accelerate adjustment and optimize industrial structure,SASAC encourages SOEs to integrate in the way of equity investment or M&A in order to achieve the goal of complementary advantage and Win-Win.With the deepening of SOEs reform and the increasing activity of state-owned assets transactions,the SASAC and MFPRC jointly issued the "State-owned assets transaction supervision and management measures",further standardize the state-owned assets transaction behavior.Under the new policy,how to design the investment scheme could effectively and efficiently help the SOEs to achieve the established goal of investment,are worth researching.In the field of equity investment,the existing research scope is limited to "M&A","valuation of enterprises" or "PE",and few researches were focused on the design of investment scheme of equity investment projects among SOEs.In the area of urban water,researches singly on business model of the "Tap Water Project","Sewage Treatment Project" or "Sludge Disposal Project" could easily be found,however,cases of packaging "Tap Water Projects" and "Sewage Treatment Projects" as a whole are very rare.This paper selects a real case of investment project of urban water which is being implemented by firm A,then gradually expand discussing the case according to the research ideas of raising questions,analysing problems and solving problems,the core issues of the paper are:Based on the analyses of basic situation of "Target company" and "Target Project",under the new supervision policy,what investment scheme options are available for firm A?What are the strengths and weaknesses of the options available?What kind of investment scheme should firm A take in order to grasp the opportunity to achieve the investment goal?What potential problems need to be focused and resolved in the future implementation of the investment project?On the basis of literature review and analysis of "Target Company" and "Target Project",five kinds of investment options are drafted,the merits and disadvantages of which are analyzed.Finally,on the basis of the basic situation and development appeal as well as the historical opportunity of firm A,the "customized" investment scheme was proposed.The paper also elaborated the implementation process of the scheme as well as the problems which should be focused in future,correspondent solutions are also drafted at the end.The main innovations are:(1)The research object is novel:The research method is the all-round analysis and the whole process research with the equity investment project of the SOEs as the case.(2)The investment scheme is original:The investment scheme selected is not only legally,convenient,efficient,but also can skillfully bypass the"entry transaction" and avoid potential uncontrollable factors,which has no precedent in firm A or in the urban water industry.(3)Corporate governance is with the times:The drafting of the governance structure closely followed the requirements of Central Committee of CPC and SASAC,which is advantageous to establish the party organization as the political core in SOEs.The significance and contribution of this paper are:The paper was based on the urban water industry but across the boundaries of the industry,from the perspective of senior managers,with the thinking of capital operation,creatively proposed legal,convenient and efficient investment scheme,which could not only guide the project to be smoothly implemented,but also could be reference of similar projects.