Research On The Risk Of Intercontinental Oil And Gas Major Shareholders’ Equity Pledge Financing

In recent years,equity pledge financing,as a new form of enterprise financing in China,has been widely welcomed by listed companies because of its simple and efficient characteristics.Equity pledge transforms the "static" equity assets into "dynamic" cash assets,which not only solves the company’s capital needs,but also maximizes the value of equity to a certain extent.Its usefulness.However,there are also great risks in using equity pledge to obtain financing.Not only the two sides of the pledge bear risks,but also the small and medium shareholders of listed companies face certain risks.Although the process of equity pledge is simple and efficient,it is greatly affected by stock price changes.When the stock price falls,the value of equity pledged by the pledgee will fall,which will result in the risk of disposal of equity by the pledgee,leading to the change of control rights of listed companies.This paper chooses Intercontinental Oil and Gas Company as a case study.Firstly,it summarizes the basic concepts and related theories of equity pledge,combs and analyses the domestic and foreign literature and theories related to equity pledge.Foreign literature mainly combs the relationship between equity pledge and corporate performance,while domestic literature focuses on the research of equity pledge to the company and corporate performance.What risks the major shareholders bring? Starting from these two aspects,this paper sums up the risks of equity pledge.Then it introduces the basic situation of Intercontinental Oil and Gas,the equity structure,the financing situation of equity pledge by major shareholders and the process of forced liquidation of equity pledge by major shareholders.Finally,it focuses on the analysis of the possible risks of equity pledge financing by major shareholders of Intercontinental Oil and Gas.This paper analyses the risk of equity pledge from two perspectives.From the point of view of listed companies,after equity pledge by major shareholders,the solvency,profitability and operating ability of intercontinental oil and gas as well as the Z-value score have declined,and the financing by equity pledge by large shareholders may bring financial risks to listed companies;the occurrence of liquidation events may make companies face control.The risk of transfer of ownership.With the decline of intercontinental oil and gas share price,major shareholders are facing a series of risks,such as debt default,stock liquidation,and the decline in the value of pledged equity.Therefore,through the listed companies and major shareholders to study the possible risks of equitypledge behavior,hoping to strengthen the relevant departments to standardize the management of equity pledge behavior,reduce the risk.This paper focuses on the risk analysis of the equity pledge of the major shareholders of intercontinental oil and gas,and finally obtains the corresponding conclusions and enlightenments,hoping to provide experience for other listed companies in the process of equity pledge.Although equity pledge meets the current financing needs of enterprises and keeps the controlling position of the major shareholders unchanged in the process of financing,the major shareholders still need to control the proportion of the Pledged Shares reasonably,avoid the occurrence of no stock pressure when the stock price falls,improve risk awareness,and make proper use of equity pledge as a financing method to promote the healthy development of enterprises.