Case Analysis Of Bail-out Fund To Resolve Equity Pledge Risk Of Private Listed Companies

Since 2018,with the tension of international trade situation and China’s economy entering the new normal,the market value of the whole stock market has shrunk sharply,and the decline of stock prices has made many enterprises that conduct equity pledge financing face great liquidity risks.In addition,after the introduction of equity pledge,new rules on asset management and other policies,financial institutions take the initiative to deleverage,which leads to the reduction of market financing and the rise of financing costs,which also poses new challenges to shareholders’ financing.As the equity pledge loans of major shareholders expire one after another,the equity structure of some private listed companies is unstable,and the refinancing ability is weakened,which leads to the operation difficulties of the companies.Private enterprises are an important subject of national economic development and national tax revenue in our country.At present,a series of problems such as equity pledge crisis and financing difficulties encountered by private enterprises in their development have become urgent problems to be solved.So far,local governments and relevant departments have set up rescue funds and issued special rescue bonds.At the same time,regulatory authorities have also launched a series of policies for stock pledge of private enterprises to make joint efforts to solve the equity pledge crisis of private enterprises.This thesis selects the Xinfu Equity Investment Fund jointly established by Bengbu Municipal government,China Cinda and Sun Shangchuan,the actual controller of Dafu Technology,as the case study object.It can not only ensure that the original control rights of the company are not transferred,but also optimize the corporate governance structure to continue to contribute to the development of Dafu Technology.Under the guidance of principle-agent theory,signal transmission theory,information asymmetry theory and control right theory,this thesis mainly discusses the motivation,mechanism and effect of rescue fund rushing to aid Dafu Technology through case study method and event study method.In order to provide some rescue ideas and reference for the design of rescue agreement for other private listed companies involved in the risk of equity pledge.In the case introduction part,the thesis firstly expounds the basic situation of the bailing parties,the process of Dafu Technology falling into the equity pledge risk and the equity pledge risk it faces.Secondly,the thesis introduces the combined rescue mode of "debt +stock" adopted by Dafu Technology,and introduces the relief process of the rescue fund in detail.In the case analysis part,the thesis firstly discusses the strategic motivation of the rescue fund to rescue Dafu Technology;Next,the operation mechanism of the rescue fund to resolve the risk of Dafu Technology’s equity pledge is studied,mainly through the signal transmission mechanism to boost the confidence of external investors,debt rescue capital injection,double GP model of equity rescue to improve corporate governance;Finally,we test the effect of the bailout,and find that the short-term market response of the bailout fund to the rescue of Dafu Technology is relatively positive.The results show that bailout funds not only carry some bailout attributes,but also carry the pursuit of value appreciation.Rescue funds can not only alleviate the short-term stock pledge risk of enterprises to a certain extent,but also improve the business performance of enterprises by improving their governance structure and integrating their external resources,so as to maximize the value of enterprises.This is a great value enhancement for Dafu Company,and also a way of sustainable development.In the long run,the operation mechanism of the bailout funds will help Dafu technology to be completely freed from the current difficult operating situation and achieve the purpose of long-term development,but the specific effect still needs to be tested by time.At the same time,the carefully designed combined bailout terms maintain the control position of the original actual controller unchanged,which is conducive to the subsequent operation of the company.However,since different fund contracts have different effects,the bail-out subject needs to formulate appropriate bail-out plans and implement bail-out according to the specific conditions of the bailed out enterprises.