The Role Of Private Placement Convertible Bond In M&A Payment And Financing Of M&A

Private placement convertible bond is a kind of convertible corporate bond issued to specific subjects through non-public way.In China,It is a new tool of M & A payments and supporting financing in recent years.With the transformation of China's economy from high-speed growth to high-quality development,domestic enterprises actively promote industry integration and industrial upgrading.However,in the process of M & A,domestic enterprises are faced with narrow financing channels and lack of payment means.This article analyzes and researches the first case of “ Xinjinggang acquiring Kuanpu Technology” that successfully issued private placement convertible bonds and used them in M & A payments and supporting financing,which is helpful to enrich the theoretical understanding of China's private placement convertible bonds in M & A payments and supporting financing.A new type of M & A payment and supporting financing tools is conducive to enterprises' M & A and restructuring,industrial upgrading,reducing leverage and solving financing difficulties.Based on a review of the relevant literature on convertible bonds and private placement convertible bonds,this article starts with the case of Xinjinggang's issuance of private placement convertible bonds from three aspects: the development history and current status;the functions and the main terms.Then this paper introduces the case of Xinjinggang issuing private placement convertible bonds.First,it explains the basic situation of both sides of this merger and analyzes the motivation of this M & A.Then,it introduces the basic situation of the transaction plan and the basic situation of Xinjinggang acquiring private placement convertible bonds in trump technology.Finally,it analyzes the characteristics of the "Jinggang private placement convertible bonds" clause design.In chapter three and chapter four,this paper compares the advantages and disadvantages of different payment methods and supporting financing methods by comparative analysis,and calculates the payment cost of M & A and capital cost of supporting financing in various ways,and analyzes the rationality of using private placement convertible bonds as M & A financing tools in this case.At last,we draw a conclusion and put forward some policy suggestions.Taking the issue of private placement convertible bonds by xinjinggang as an example,this paper studies the contents of private placement convertible bonds,and draws the following conclusions: Private placement convertible bonds combined with other M & Atools and supporting financing tools can reduce the M & A payment cost and supporting financing cost of the acquirer to a certain extent;private placement convertible bonds are a new M & A financing tool with characteristics and conforming to the development of market.The issuance of private placement convertible bonds can reduce the pressure of timely cash payment,and also delay the dilution effect of stock rights;The design of special terms for convertible bonds reflects the issuer's motivation for conversion.The introduction of special terms such as upward revision of conversion price and compulsory conversion can better balance the interests of both sides of the transaction.Finally this article suggests that China should vigorously promote private placement convertible bonds and use them for more purposes such as M & A payments refinancing or angel investment;further improve the term design of private placement convertible bonds to accomplish the issuer's motivation;At the same time improve the relevant laws and regulations of private placement convertible bonds to ensure that private placement convertible bonds can better serve our economy.