Guosheng Group Can Exchange Debt Financing Plan Design Research

In September 2008,the China Securities Regulatory Commission(CSRC)published the "Trial Provisions on Issuance of Exchangeable Bonds by Shareholders of Listed Companies(draft version)" to seek public comments.On 29 October 2008,the "Trial Provisions on Issuance of Exchangeable Bonds by Shareholders of Listed Companies" was formally promulgated,which stipulates that a listed company's shareholder,represented by a sponsor,may apply to the CSRC for issuance of exchangeable bonds and that exchangeable bonds can only be exchanged for the to-be-exchanged shares in twelve months upon completion of the issuance,and a bond holder has the option on whether or not to exchange his shares.In 2013,the Shenzhen Stock Exchange issued the "Notice on Matters Related to the Pilot Programme for Small and Medium Enterprises Issuing Exchangeable Private Placement Bonds".In 2014,the regulatory provisions on exchangeable bonds were further elaborated,providing specified guidelines on the practice of issuing exchangeable bonds.Baosteel Group successfully issued its first public exchangeable bond towards the end of 2014.In 2015,new administrative measures on the issuance and trading of exchangeable bonds were released,which lowered the threshold for issuing exchangeable bonds,streamlined the procedures for non-public offering of exchangeable bonds and brought in new trading venues.These developments have provided new growth opportunities for Guosheng Group to raise funds and perform tasks as a platform company.As he has participated.in the exchangeable bond issuance launched by Guosheng Group,the author,beginning with Guosheng's financing needs,examined matters related to this issuance by a review of different financing means,the set-up of issuing conditions and post-issuance effects,thus providing valuable advice on domestic theoretical study of exchangeable bonds issuance research and practice.In spite of the fact that this article could,to some extent,promote study and practice of exchangeable bonds issuance as it has demonstrated this case on the basis of theory,there are some defects in this article.First,the author's confidentiality obligation to Guosheng in terms of some statistics has restricted his analysis of the set-up of conditions,pricing and motives behind this issuance.Secondly,the author has limited practical experience as his study about potential issuance risks to companies as well as the public and about related precautionary measures is still at the theoretical stage.