Discussion About Management Buy-outs Financing Of S Company

MBO,in short refers to the management of the enterprise obtain funds through various channels of financing and use these funds and some means buy shares or assets of the enterprise directly or indirectly,and then through the change of ownership structure of enterprises to get the acquisition of control rights and ownership of the target enterprise,the management of the implementation of this act the ultimate goal is to change their identity by business operators for business owners.The origin of MBO should be traced back to the last century in 70 s in the United States,Europe and other developed countries,this acquisition of more than forty years of development has become increasingly standardized,and the use of this important financial innovation and system innovation mode,effectively reducing agency cost of enterprises and optimize the company's equity the structure,is to promote the orderly development of social economy in developed countries.In the process of MBO how to use resources or legal means to raise enough funds for the acquisition of whether management can be successfully completed MBO have important links,in addition to the successful acquisition of capital sources and validity of the inevitable connection,therefore,MBO has been a source of funding for the acquisition those who do not want to mention the topic.The author found that the study of the existing financing environment and policy requirements in China,the choice of appropriate financing methods has important practical significance.S company is a typical case analysis has the significance,because the management level of S company in the acquisition process using a variety of means of financing to raise funds for the case with the relevant theoretical basis and S company 's research results,to study the financing problems of MBO is easy to encounter.Based on the case analysis is divided into five parts.The first part reviews the development of MBO in China and the problems existing in financing,At the same time,this paper introduces the significance of the research,related literature and research ideas,With the development of private economy and family business in china,MBO will no longer be limited to the scope of large state-owned enterprises,How to effectively integrate the resources of private enterprises in the market environment of China and choose the most suitable financing mode,the successful completion of MBO,and make the enterprise more healthy development in the future,This question is to be studied in China.The second part is about the theory ofMBO financing,expounds the concept and theoretical basis of MBO,It mainly introduces the financing methods of MBO,which can be divided into three types: debt financing,equity financing and mixed financing,It also introduces the relevant provisions of the state on the MBO financing entity,the issuance of corporate bonds and the use of bank equity pledge loans.The third part briefly describes the general situation of S company and the plan of MBO,it introduces the financing sources in the financing process in detail,which mainly includes three aspects: the self financing of the management,the participation of the top three private equity funds and the investment bank's investment.The fourth part describes the characteristics of S company's MBO financing methods,it points out that the responsibility and obligation of the parties involved in the financing are clear,analyzes the main motivation of introducing private equity funds into the management buyout financing,which is to solve the problem of long term equity dispersion of S company?improve the effectiveness of long-term development strategy and reduce the company's performance decline pressure,at the same time,after the introduction of venture capitalists,not only a good market response has been obtained,but also other good results have been achieved.The fifth part draws a conclusion that the financing mode of S company provides strong support for MBO and the feasibility of introducing venture capital into MBO financing and it is suggested that management can use the MBO fund,trust and strategic management.In this paper,the author analyzes the financing way of MBO in S company,and provides some experience for other enterprises to choose the financing way in the process of MBO.But there are still some shortcomings need to delve into the following aspects:firstly,this paper selects the case of S company is listed on NASDAQ in the United States,and China's legal regulation of listed A shares by different enterprises,S company mainly by the United States Securities and Exchange Commission regulation,state-owned or private enterprises in China mainly by the commission such institutions,their restrictions are not the same,therefore our country enterprise management in the process of MBO according to their specific circumstances,choose the most suitable for enterprise financing;secondly,S companies followed by the acquisition of shares to tradable shares,at present a lot of management in the implementation of MBO when more is the acquisition of enterprises such as non tradable shares,corporate shares,if directly using the mode of S company MBO maybe impracticable.The law of our country at present for enterprise management MBO still has many restrictions;these restrictions may help prevent the loss of state-owned assets,but for the successful implementation of MBO caused great obstacles.After the management of the S company in the Virgin Islands Invest-holding Company set up using it as the subject of S shares for the acquisition,the behavior of the legal supervision by the United States,and in 2006 after the new "company law" in the amount of foreign investment enterprises also liberalized the restrictions shall not exceed fifty percent of net assets abolished,so the mode of management's operation is legal in our country.