Risk Analysis And Prevention Of Stock Reduction Based On Exchangeable Bonds

In the past 4 years,more than 170 exchangeable bonds have been issued in China with the scale of raising funds exceeding 210 billion yuan.Exchangeable bonds have advantages of moderation,orderliness and less influence on the security market,so they are increasingly favored by dominant shareholders.However,when issuing exchangeable bonds to reduce shares,it will face risks such as stock market risk,bad financial situation,reduction of compliance risks and limited scale of exchange,which affect the exchangeable bonds' function of share reduction,as well as the healthy development of the company.Therefore,it will be a great significance to analyze the risk of the exchangeable bonds' reduction and find out the precautions,which is of great importance to better play the role of the reduction of the shares of the exchangeable bonds,reduce the risk of the enterprise and maintain the stability of the securities market.Through case analysis,this paper analyzes the risks faced by the GER Group Co.,Ltd(GER group)during the process of issuing exchangeable bonds and reducing shares.On this basis,this paper thus puts forward the measures to deal with the risk presented above.The whole paper contains the following parts: The chapter I explains the significance of the study on the risk of the reduction of exchangeable bonds and presents the relevant literature on this field at home and abroad.The chapter II is an overview of the related theories,including the business process and policy guidance of exchangeable bonds,and introduces the concepts,methods and related theoretical foundations of controlling shareholders and large shareholders.The chapter III analyzes the current situation of the reduction of exchangeable bonds in China's capital market,and introduces the current situation of the exchangeable bonds,the scale of the reduction,the reasons for the failure and the risk of the reduction of the exchangeable bond shares in our country.The chapter IV introduces the case of GER group's exchangeable bond reduction process,and analyzes the reasons for the reduction of GER group.The chapter V analyses the risk of GER shares in the process of exchangeable bond reduction in four aspects : securities market risk,bad financial situation risk,reduction of compliance risk and reduction scale.The chapter VI gives some risk prevention measures concerning about the case study and the current risk of China's exchangeable bond reduction shares.Through the analysis,we can find that a variety of measures should be taken to deal with the violent fluctuation in the securities market.Besides,we should take various measures to deal with bad financial situation risks actively and cooperate with the regulatory authorities to achieve compliance reduction and use a variety of reduction methods to improve the reduction scale.