Research On The Risk Of Performance Commitment In Major Asset Restructuring Of Listed Companies

Since the 21 st century,with the rapid development of China’s economy and the prosperity of the national economy,the gross domestic product(GDP)has reached new highs.China’s capital market is also booming,and the number of domestic enterprises using the capital market to promote their own development is also increasing year by year.Unlisted enterprises enter capital market through IPO,and listed enterprises choose major asset restructuring to enhance market competitiveness and expand industrial scale.In recent years,the market for major asset restructuring has been active and will continue to develop in the future.However,with the continuous expansion of the scale of major assets,risks arising from major asset restructuring are accompanied.In the major asset restructuring plan,the trading parties often set performance commitment targets to prevent and control the situation that damages the interests of the shareholders of the restructuring party in the process of major asset restructuring.However,in practice,after the completion of major asset restructuring,performance commitments are not fulfilled in the performance commitment period.On the one hand,performance commitment plays an important role in preventing and controlling major asset restructuring risks and protecting the interests of restructuring parties,but on the other hand,it also brings certain derivative risks to major asset restructuring of enterprises.Therefore,how to identify and control the risks brought by the performance commitment mechanism in the process of major asset restructuring is a practical problem that needs to be solved urgently.In this paper,through the research and sorting out of the relevant literature on performance commitment in the process of major asset restructuring at home and abroad,we select the major asset restructuring of W Company as the case study object.In this case,the original intention of the major assets of the listed company is to solve the negative impact of the major credit risk issues of its subsidiaries on the listed company and enhance its profitability.The controlling shareholder of the company injected its holding subsidiaries into the listed company,with a view to expanding the asset scale of the listed company,improving the profitability of the listed company and establishing a good image of the listed company through major asset restructuring.In this case,the performance commitment mechanism was introduced into the major asset restructuring plan,but the promised profits were not completed in the performance commitment period,which is representative.In this case,the basic information of all parties involved in major asset restructuring,the background of starting major asset restructuring,the process of restructuring,the motivation for signing the performance commitment agreement,the specific content of the performance compensation agreement,and the completion of the performance commitment in each year of the commitment period are introduced first,and then the reasons for the unfinished performance commitment,the existing risks,and the causes are analyzed in combination with the situation of listed companies.Finally,from the perspective of listed companies,It focuses on the summary,analysis and demonstration of the risk response measures of performance commitment,and explains how listed companies can avoid the risks brought by performance commitment itself when using performance compensation agreements to avoid risks.Through the study of this paper,it is found that the introduction of performance commitment mechanism in major asset restructuring can not only prevent related risks,but also send a positive signal to the market.It is effective for expanding the business scale and asset volume of listed companies,improving business income and net profit in the short term,but it has limited effect on improving the long-term profitability of listed companies.When the performance commitment fails to reach the predetermined goal in the process of major asset restructuring,its impact on the market is also significant.When the performance commitment is not completed,it not only affects the performance of listed companies,but also has a certain impact on the image of listed companies in the capital market,thus damaging the confidence of investors.Therefore,even if the performance commitment provides a certain guarantee for the major asset restructuring of listed companies,it should not be completely relied on.When using performance commitment to avoid the risk of major asset restructuring,listed companies should pay attention to whether the underlying assets have the ability to fulfill performance commitments,and at the same time pay attention to their own risks,protect the interests of both sides of the restructuring,and promote the healthy and stable development of China’s capital market.