Research On Legal Regulation Of Leveraged Buyout Financing In Our Country

Leverage Buyout(LBO)is a kind of corporate acquisition method which was born in the United States in the 1960 s and 1970 s.The core of LBO is that the purchaser uses financial leverage to increase the proportion of debt financing to acquire the equity of the target company.In leveraged buyouts,the most important issue is the financing of debt,the degree of difficulty directly determines the success of leveraged buyouts.As this new acquisition method is conducive to accelerating industrial integration,activating the capital market,promoting the survival of the fittest,and improving the management of enterprises,it has developed rapidly since its emergence,and soon became a fashionable global acquisition method.In recent years,with the development of China's market economy,mergers and acquisitions between enterprises are increasing,large enterprise groups have achieved unconventional development through the means of capital operation.As a new type of enterprise acquisition,leveraged buyout(LBO)is attracting more and more attention from both theoretical and practical circles.What kind of financing system is needed and what legal dilemma is faced with in the implementation of the acquisition in China,which originates from western countries,are the problems that must be faced in the development of leveraged buyout in China.This paper analyzes the difficulties faced by leveraged buyout financing in China from the perspective of law,and explores the countermeasures to solve the financing problems of leveraged buyout in order to promote leveraged buyout in China.This article mainly discusses from the following aspects:The first part starts with the basic facts of Baoneng's acquisition of Vanke,and comments on the controversy brought about by Baoneng's leveraged financing and the acquisition of Vanke with insurance capital.It is concluded that Baoneng's acquisition not only increased the risk of the securities market,but also increased the risk of the insurance market,affected the stability of the financial market and exposed China.Loopholes in relevant legislation.The second part mainly explains the basic theory of leveraged buyout.Leveraged buy-out is a capital operation mode in which the assets and cash flow of the acquired company are guaranteed,the bonds are issued as the main source of financing,the shares of the target company are acquired,and the assets of the target company are reorganized after the acquisition of the shares of the target company is completed,and the assets are liquidated to repay the liabilities.Leveraged buyout will increase the risk of the capital market,especially the legitimacy of the source of acquisition funds.China's capital market should allow the existence of leveraged buyout,but it needs to establish a sound leveraged buyout system.The third part mainly analyzes the problems of leveraged buy-out in China.Including a single acquisition subject,mainly industrial capital,and lack of financial capital participation;financing and acquisition pricing lack of market-oriented,undermining the three principles of the market;financing channels are not smooth,the western mature market prevailing bank loans,bridge loans,junk bonds and preferred stock mortgages and other financing methods,in China are all.Limited;lack of leveraged buy-out related legislative support,"Company Law","Securities Law" and "Measures for the Management of Listed Companies' Acquisition" have failed to make clear and detailed provisions on leveraged buy-out,so that the stock market is prone to policy swings.The fourth part puts forward the suggestion of perfecting the legal system of leveraged financing acquisition in China.It is mainly to strengthen the legislative support of the new financing methods,loosen the traditional financing methods and strengthen the market supervision of leveraged buyout financing.Short-term measures are to seek flexible measures under the existing legal framework,use trust financing and joint acquisition to solve the financing gap in the acquisition.Long-term measures are to improve the financing legal system from the credit system,legal system,regulatory system and the stock circulation system.