| With China’s economic development into the new normal,transformation and upgrading of enterprises becomes the calling of the time.The best way to stimulate the transformation and upgrading of listed companies is the development of equity financing.The healthy and stable stock market provides the channel for the innovation of our country’s listed companies.As the most important way of refinancing of listed companies in China,private placement has gradually become the main means of capital operation of listed companies in recent years.Listed companies not only use private placement for simple financing,but also through private placement for mergers and acquisitions,replacement and reorganization of backdoor listing.It has profound implications for integrating upstream and downstream business enterprise resources,expanding main business and promoting businesses to upgrade and transform.However,private placement is also a “double-edged sword”.The majority shareholder of the listed company may take this opportunity to take the equity as the link in the asset securitization to realize the benefit transmission,to further strengthen the control of the listed company.They transferred profits and resources into their own hands.The majority shareholder of the listed company ultimately harmed the interests of the minority shareholders.Based on the summary of domestic and international research results,this paper adopted the method of combining theoretical research with case study,taking Yutong Bus in 2014 from the Yutong Group and its subsidiaries in the acquisition of Zhengzhou Jingyida Automotive Parts Co.,Ltd.(referred to as: Jingyida)as an example.This paper analyzed the phenomenon of tunneling and alignment of benefits behind private placement.First of all,the concept of private placement,tunneling,alignment of benefits are introduced and the related theories are summarized.Then the domestic and foreign literature review is sorted out.Secondly,this paper introduced the relevant background of Yutong bus by adopting the way of private placement and cash purchase,and made a brief introduction to the process of acquiring 85% equity of Jingyida by using private placement.After the analysis,there are two kinds of ways about tunneling during the whole private placement:low price issue and injection of overvalued assets.From the private placement pricing analysis,this paper found that Yutong Bus achieved low-cost issue by selecting the lower price of the time and choosing the lowest price of the date of announcement of the resolutions of the Boardof Directors as the pricing base date.In this situation,the large shareholders took additional stakes by the same amount of assets.Analysed from financial condition and transaction price rationality about injection of assets,this paper found that Jingyida actually is just a“production workshop”,economically depends entirely on Yutong Group,and the appraisal value was overvalued.In this situation,Yutong Group can obtain additional shares by acquiring additional consideration.On the one hand,the minority shareholders in the secondary market through the open market trading price to obtain equity,large shareholders through the hidden means to obtain low-cost way to equity.In this case,this will inevitably lead to different shares with the price.On the other hand,the large shareholders further strengthen the control of Yutong Group with low cost which minority shareholders were diluted at a deeply discounted rate.This will lead to the tunneling from the minority shareholders who do not get the additional right to the Yutong Group,both of which form the redistribution of wealth.The majority shareholder achieved control of the management gains and damaged the interests of minority shareholders.In addition,this paper also found that private placement not only contributed to the tunneling,but also brought alignment of benefits.The acquisition of Jingyida does reduced the related party transactions and enhanced the independence of Yutong Bus.In the long run,this additional issuance allowed investors to obtain additional revenue and operating performance reflects the synergies.Yutong bus industry chain has also been further improved.Finally,this paper put forward some suggestions to improve the private placement,hoping to provide some enlightenment to formulation of relevant policies and regulations which are gradually improving and to bring alignment of benefits into a full play. |
