Case Study Of The Equity Carve-Outs About Shanghai Electric Group Company Limited

Equity carve-outs and listing are widely used in European and American capital markets as a means of asset restructuring,but due to regulatory requirements,there are few successful cases of domestic carve-outs and listing.At the end of 2019,the new regulations issued by the China Securities Regulatory Commission clearly indicates that companies will be listed after certain conditions are met.Subsidiaries can be carved out for domestic listing,and in just over a year later,more than 50 companies have expressed their intention about carve-outs.In the context of domestic carve-outs in full swing,analyzing the successful cases of domestic carve-outs and listings of companies can not only fill the research field,but also have strategic significance for subsequent companies to learn from their experience.Based on the recapitulation of research analysis from all over the world which are not only about motivations but also about economic consequences of the equity carve-outs and listing,this thesis which applies capital market theory,choose to use both normative analysis and case analysis and adopts Shanghai Electric Group Co,as the object to conduct research.The study’s three parts are: The first part is theoretical analysis,that is,through the summary,the basic issues such as the conditions,process,and motivation of the carve-outs and listing are explained;the second part is case analysis,that is,the first part is to sort out the plan from the disclosure of the plan to the official listing.The carve-outs process of the company,and then compared with the existing research theories,explore the motivations that promote the company to choose carve-outs and listing,including:(1)Complying with national policies,deepening the mixed reform of state-owned enterprises,(2)Expanding financing channels,and alleviating financing needs,(3)Grasp the market segment,maintain a leading position,and then study the economic consequences,and found that with the progress of the carve-outs and listing,the company’s market value did not fluctuate significantly at the critical time,but the carve-outs and listing improved the governance of the subsidiary Electric Wind Power.The third part is countermeasures and suggestions,that is,in response to this case,it is proposed that the carve-outs and listing must be based on the development strategy,the listing location must be reasonably selected,and the resources must be integrated to follow up development.This thesis draws certain viewpoints and conclusions through case studies on the issue of carve-outs and listing.The main reasons are that the company’s choice of carve-outs and listing may be driven by policies,financing needs,and business development;carve-outs and listing improve the governance mechanism of subsidiaries in the short term,and have less impact on the company’s value,and changes in company value may be reflected in the long-term.