Baili International’s Privatization And Delisting Based On Strategic Adjustment

For a long time,it is an important direction of our capital market reform to solve the difficult problem of listing and delisting.With the full implementation of the registration system reform,the conditions of issuance and examination have been relaxed,and the delisting system has been perfected.On the one hand,it is easier for emerging industries and high-quality enterprises to get listed.On the other hand,it also provides the choice of delisting for enterprises facing development bottleneck and in urgent need of transformation.Since the implementation of the new delisting regulation,listed companies that have applied for voluntary delisting in Chinese securities market are mainly for the purpose of board transfer and reorganization,and few choose temporary delisting cases based on strategic adjustment.Going public can broaden financing channels and improve a company’s reputation,but it also faces a stricter regulatory environment and higher maintenance costs.When an enterprise faces temporary difficulties,it can obtain greater flexibility in production and operation by delisting,and the equity transfer is less restricted.If companies can use delisting opportunities to complete strategic adjustments and improve performance,they can seize the opportunity to seek re-listing.Belle International was once known as the king of shoes,in the field of footwear has extraordinary influence.However,with the rise of the Internet economy,customer demand has changed,and the original strategy of emphasizing retail over brand and focusing on offline channels has been unable to adapt to the changes in the environment,leading to the dilemma of enterprise operation and the urgent need to make adjustments.However,the listed status of Hong Kong stock brought many obstacles to the strategic adjustment.On the one hand,the financing function of listing was weakened due to the low stock price and trading volume.On the other hand,due to the limitation of equity transfer,it is difficult for major shareholders to withdraw and strategic investors to introduce.At the same time,short-term performance fluctuations will affect stock prices,and strategic adjustments are difficult to carry out.Accordingly,Belle International chose to temporarily delist.Because delisting is not the ultimate goal of the company,in order to facilitate later re-listing,it is particularly important to grasp the timing of delisting,the formulation of the purchase price,the selection of partners and the control of delisting risk,so as to protect the company’s reputation from delisting.Based on this,Belle International chose to buy back its shares at an average premium rate when the stock price was low,which not only reduced the cost of privatization,but also avoided additional litigation.At the same time,the funds needed for stock repurchase are mainly provided by strategic investor Hillhouse Capital,which effectively prevents the daily production and operation of enterprises from being affected.Moreover,Hillhouse Capital is involved in many hot fields such as retail and Internet,which can provide digital and technical resources for enterprise transformation.Only 90 days to July 27,2017,Belle International successfully delisted.After delisting,companies face a lighter regulatory environment and do not need to take stock price volatility into account,allowing them to focus on long-term growth and improve decision-making efficiency.Under the close cooperation with strategic investors,through organizational reform and digital-enabled omni-channel,Belle realized customer-centric and digitalized core competitiveness reconstruction.The company’s performance rose during the epidemic.In 2019,the company successfully spun off its sports business and listed it on the stock market,and submitted a re-listing application in 2022.From the privatization and delisting experience of Belle International,when the basic conditions are good,the enterprise can choose to temporarily delist to focus on strategic adjustment when the development bottleneck is encountered.Based on this,in the formulation and implementation of the delisting plan,enterprises should focus on the long-term,take into account all possible risks,maintain their own image,and facilitate the later re-listing.At the same time,in the implementation of strategy after delisting,enterprises should closely focus on customer needs and use digitalization to improve core competitiveness.It is expected that the research of this paper can provide more broad ideas for the development of other companies.