Research On The Financing Of The Share Pledge Of The Majority Shareholders Of BF Group

In recent years,under the influence of financial deleveraging and the overall decline of the stock market,listed enterprises and private small and medium-sized enterprises generally face the problem of difficult and expensive financing,which highlights the unique advantages of the financing mode of equity pledge in cost,efficiency and control,and gradually wins the favor of listed enterprises.However,since the second half of 2018,the equity pledge crisis has flooded the market,and there has been the sound of forced liquidation of enterprises.Major shareholders,as the party holding a large proportion of the shares of listed companies,choose to pledge their own equity holdings to obtain financing when facing the shortage of funds,so as to help enterprises tide over difficulties.However,there are various financial risks and operational risks in the distressed enterprises themselves,in addition to the moral risks of the tunneling of major shareholders and the irregularities in the pledge process,which will lead to immeasurable problems.Based on the financing needs and financing channels of BF Group,this paper analyzes the necessity of equity pledge financing by major shareholders combined with the comparative advantages of equity pledge.Through the statistics of the data of stock pledge in past times and the analysis of the behavior of stock pledge transaction,this paper explores the deep situation of extended repurchase,redemption and pledge and non-standard information disclosure behind the pledge,and finally summarizes the effect of stock pledge financing.This paper focuses on the following core issues:it discovers that the current market value of BF Group is overvalued,and the funds pledged by major shareholders’ equity do not match their real financing capacity;The pledged shares have a very high possibility of liquidation,and the low disposal ability of the major shareholders causes negative economic consequences to the pledgor,the pledgee and the listed enterprises.Major shareholders are very passive on the issue of capital payment of pledged shares due,so they can only get through the pledge dilemma with the help of external forces first,and work with the management to improve corporate governance in the future production and operation,so as to avoid repeating the same mistake.In conclusion,from the perspective of the pledgee,it is necessary to seriously prevent the valuation risk of exaggerating the financing ability of the equity pledge caused by the inflated stock price and reduce the possibility of the pledgor to withdraw funds.However,the enterprise itself must make it clear that the financing approach of equity pledge cannot be relied on as a long-term cash flow for the enterprise.In particular,for an enterprise like BF Group,where the moral hazard of major shareholders is not prominent,it must give full play to its subjective initiative and effectively integrate equity pledge into capital to improve its operating performance.With the gradual maturity and redemption of the pledge business of major shareholders of listed enterprises,financial institutions should be more cautious to engage in such business in the future,to create a standardized external environment for pledge of shares,and to prevent risks.