Study On The Mode And Effect Of Local AMCs Bailout Listed Private Enterprises

The development of the private economy is an indispensable force in maintaining economic vitality and promoting the transformation and upgrading of the economic structure,and plays an obvious role in national taxation,technological innovation,urban and rural labour employment,etc.The "financial deleveraging" policy launched in the second half of 2017 has led to a tightening of the scale of corporate credit,and various investment channels such as banks,insurance and capital management schemes have been severely restricted.Many major shareholders of listed private enterprises have taken investment in the form of stock pledges with a view to solving the situation of tight cash flow of enterprises,while the increasing pledge rate of major shareholders’ equity has seriously affected the normal production and operation activities of listed companies and posed great risks to the stability of the equity structure of companies.As the domestic economy enters a new normal,a series of improvement measures have been taken by local governments,financial institutions and brokerages to effectively mitigate the liquidity risks faced by private enterprises and prevent systemic risks arising from risk overlap.Local AMCs are not only making a big difference in clearing out backward production capacity,revitalising advantageous production capacity and transforming and upgrading the real economy.As an important force in preventing and resolving risks to financial and real enterprises,local AMCs have set up bailout funds to help enterprises alleviate liquidity risks and help problematic enterprises to relieve themselves from distress.Research on the choice of bailout model can help the effectiveness of bailout actions,and exploring the bailout mechanism can help design bailout solutions to help enterprises get out of trouble.This paper analyses the bailout process in detail based on the actual situation of Hunan Capital Management’s bailout of Jin Gui Yin,starting with the motives of the bailout party and the bailed-out party,followed by an analysis of the short-term market performance,financial performance and financial risks of Jin Gui Yin after the bailout to obtain the bailout effect of the equity bailout,a comparison between the debt bailout model and the equity bailout model,and a discussion of the reasons for the choice of the operating model.From the perspective of Hunan Capital Management,the debt bailout and equity bailout for Jingui Yinye not only responded to the Hunan Provincial Government’s call to bail out listed private enterprises and reduce local financial and economic risks,but also provided a bailout that was in line with its own development and increased its bailout experience.From the perspective of the bailed-out party,the bailout has not only improved its operating conditions,but also its debt structure,the collapse of its equity pledge and its poor governance structure.