A Study On The Economic Consequences Of Private Placement In Powerchina Under The Background Of Deleveraging

With the implementation of supply side structural reform in2015,More and more attention has been paid on the adverse impact of the high total debt and obvious growth rate of Chinese enterprises on the national economic operation.It is imperative for state-owned enterprises,as the representatives of high debt enterprises,to deleverage.In the same year,the State Council distributed the policy on the reform of mixed ownership of state-owned enterprises,promoted the government's social capital cooperation(PPP)model,and promoted the diversification of investment subjects.In the implementation of these two policies,equity financing has become a feasible means.This paper focuses on PowerChina's private placement activities under the background of mixed reform and takes the deleveraging of state-owned enterprises as the research object.On the basis of the previous scholars' theory and research,the performance of private placement is analyzed quantitatively through financial index data,which is generally divided into theoretical research and case study.The theoretical research includes literature review,theoretical basis and policyanalysis.Firstly,the paper reviews the relevant literature on financing advantage,announcement effect and performance analysis of directional additional issuance.Secondly,it links the theories of optimal capital structure hypothesis,information asymmetry theory,announcement effect theory,agency cost theory and supervision effect theory with the relevant financial indicators Finally,it analyzes the motivation and significance of the policy of deleveraging and mixed ownership reform of state-owned enterprises.In the case analysis,firstly,it briefly introduces the basic situation of PowerChina and combs and analyzes the process,motivation,equity change and the use of raised funds of the company's implementation of directional additional issuance,and makes an intuitive response through the content of the chart.Secondly,the paper analyzes the financial effect of the directional additional issuance of PowerChina from two aspects: short-term and long-term,and adopts the methods of event research and financial index analysis,and analyzes the impact of the directional additional issuance on the comprehensive performance of the company through EVA economic added value.Through the above analysis,this paper draws the following conclusions:(1)PowerChina raises the required funds in the way of directional additional issuance,reduces the asset liability ratio of the enterprise,plays a role of reducing leverage,but has no significant impact on the long-term performance of the enterprise;(2)PowerChina'sdirectional additional issuance for the purpose of project financing has no positive market reaction in the short term In the short term,there is no increase in the value of the enterprise;(3)the implementation of the targeted issuance has a negative impact on the return on net assets and EVA in the short term of the current period,but from the perspective of avoiding financial risks,equity financing is a better choice than debt financing;(4)In terms of the effectiveness of the control leverage,the leverage ratio of PowerChina in the early stage of private placement did decrease,but it picked up slightly later.We can draw inspiration from the analytical case:(1)deleveraging is related to the contradiction between the national strategic needs and the individual needs of enterprises.In the overall situation,the state-owned enterprises should obey the national strategy to achieve "stable leverage",and the state should also It can play a role of supervision by increasing the proportion of relative value indicators;(2)private placement as the introduction of long-term performance in the mixed ownership reform of state-owned enterprises.The means of institutional investors can strengthen the supervision motivation of the owners,but in order to improve the enthusiasm of external capital to participate in management,they should also have more say;(3)reducing the leverage of enterprises through equity financing is conducive to the improvement of the solvency of enterprises,but the project financing oriented private placement haslittle impact on the long-term performance of enterprises;(4)the long-term financial performance of enterprises after private placement should be paid attention to.