Motivations And Economic Consequences Of Bank Of China’s Spin-off Of BOC Aviation’s Listing

With the rapid development of China’s economy,China’s capital market is moving towards a more mature and more standardized direction,and the fierce market competition also puts forward higher requirements for the industrial structure of enterprises.Chinese enterprises at the beginning of the capital market construction,usually choose expansion of enterprise scale,by means of merger or acquisition to achieve diversification,but diversification for the enterprise of decentralized management risk at the same time also appeared a series of problems,such as the enterprise internal resources scattered business,management efficiency,belong to unable to get sufficient development funds and so on.As an important way of shrinking assets reorganization,spin-off and listing can reduce the adverse effects of diversification in group enterprises,which has gradually attracted unprecedented attention.Therefore,in-depth analysis of the motivations of the spin-off listing and whether the spin-off listing can promote the future development of the parent-subsidiary company is the focus of our current attention.The case of bank of China’s spin-off of bank of China aviation leasing co.,ltd.in this paper is the first spin-off listing in the banking sector,which has certain research and reference value.Combined with the relevant theories of spin-off listing,this paper analyzes the motivation of spin-off listing and the economic consequences to the parent-subsidiary company.Firstly,the concept and theory of spin-off listing are expounded,and the value of spin-off listing and its possible impact on the capital market are introduced.Secondly,this paper introduces the case of bank of China’s spin-off of bank of China aviation leasing co.,LTD.,and analyzes the economic consequences of the spin-off to the parent company from the perspective of the background and motivation of the company’s selection.For subsidiaries,it is beneficial for subsidiaries to ease financing constraints,broaden financing channels,reduce agency costs and enhance core competitiveness.Finally,the research conclusion of the paper is summarized and several Suggestions are put forward for improving the spin-off listing of listed companies.Only by fully understanding the spin-off listing,combining withtheir own development needs,and choosing the operation mode suitable for them,can enterprises obtain the maximum benefits.Based on the above analysis,this paper summarizes the case of bank of China’s spin-off of boc aviation leasing co.,LTD.For the parent company,the spin-off reduces the burden of investment and financing of bank of China,solves the problem of information asymmetry,and raises the parent company’s short-term stock price.For the subsidiaries,boc aviation leasing co.,ltd.gained development funds and improved management efficiency through the spin-off and listing,which is conducive to the realization of strategic objectives and the enhancement of corporate value.At the same time,it also puts forward some Suggestions on the split listing of the banking industry and other industries.Second,the spin-off listing should choose high-quality assets;Third,we should make full use of the financing effect of spin-off listing.