Research On Payment Mode Of R Company’s Directional Convertible Bond Acquisition

Mergers and acquisitions play an important role in improving the industrial layout,adjusting the strategic focus and improving the capital structure of enterprises.The smooth completion of mergers and acquisitions is not only conducive to enhancing the competitiveness of enterprises to further expand their market share,but also can make up for their own shortcomings to solve their own sustainable development problems.Under the background of China’s market economic structure adjustment,the traditional m&a payment method has obvious defects both in the form of payment and in the effect of subsequent payment,which is difficult to adapt to the needs of market development.Based on this situation,in order to break the current situation of long procedure of original payment method and low success rate of merger and acquisition,China’s securities regulatory authority issued a series of pilot notices of directional convertible bonds,and used directional convertible bonds as a new payment tool to promote market recovery.On July 1,2019,R company Photosensitive announced the suspension of trading and decided to take directional convertible bonds as the main method of acquisition,mixed with other payment methods.Among them,the payment ratio of directional convertible bonds reached 60%.The high proportion of the m&a of directional convertible bonds makes directional convertible bonds a typical representative of the third payment tool of M&A besides shares and cash.Foreign countries are the first to adopt directional convertible bonds as the payment method of mergers and acquisitions,related research is relatively mature,convertible bonds participate in the whole process of mergers and acquisitions is more standardized and systematic.In view of the late development of China’s market,there is a lack of research on the theory of convertible bonds,and there are few cases related to reference.The differences between domestic and foreign markets also make it impossible to directly apply foreign research results.Therefore,the research on the payment of directional convertible bonds needs in-depth study in terms of design terms,pricing,issuance timing and potential risks.This paper finds that directional convertible bonds,as a new payment instrument with both equity and bond properties,can protect the interests of both parties and promote the smooth progress of mergers and acquisitions through reasonable design of terms and subsequent rights to transfer shares.At the same time,through the analysis of the financial index data after the acquisition of the sub-directional convertible bonds of R company,it is concluded that the directional convertible bonds have significantly improved the financial situation of the enterprise.However,the timing and pricing of directional convertible bonds still have corresponding risks,and the failure of subsequent equity conversion of directional convertible bonds will also cause subsequent financing problems.Therefore,in view of the case study of R company photosensitive merger and acquisition,the relevant research results of directional convertible bonds are summarized by dissecting sparrows.On the one hand,it can improve the relevant laws and regulations and implementation rules of subsequent directed convertible bonds in China;On the other hand,it provides experience and reference for subsequent enterprises adopting directional convertible bond.