Research On Operation And Effect Of Rescue Fund For Private Listed Companies

Private listed companies play a pivotal role in China’s economic development,but due to the nature of the enterprise,deleveraging policies and macroeconomic growth slowdown and other factors,in the long-term development process there is a general problem of financing constraints,it is easy to have a shortage of funds and fall into liquidity difficulties,and thus the lower cost of equity pledge financing gradually became the private listed companies choose to raise funds,but the high pledge rate will lead to high risk.In 2018,the A-share market was in the doldrums and most private listed companies began to experience "mines".Therefore,in 2018,the State introduced policies to bail out private listed companies with the aim of helping private listed companies overcome liquidity crises and reduce risks arising from stock pledges through the entry of state-owned capital,which plays a pivotal role in promoting economic prosperity and maintaining market order.Based on this,various local government departments have introduced policies related to bailout according to local conditions and set up bailout funds to take measures to help private listed companies in various aspects such as capital chain,business scope and talent introduction,focusing on solving the liquidity problems of private listed companies.It is in this context that the state-owned bailout fund was born.However,how effective is the bailout fund as a new type of financial bailout product into private listed companies? In view of this,this paper focuses on the operational motivations of state-owned bailout funds for private listed companies and the impact of the effects produced.This paper takes a case study of the Bengbu Municipal Government and China Cinda’s bailout of Dafu Technology and explores how the problem was solved while maintaining the core control of the founder,Sun Shang Chuan.The case study first introduces the process of the state-funded bailout of Dafu Technology,then analyses the motivation for the state-funded bailout from the perspective of both the bailout party and the bailed-out party,then examines the mechanism by which the bailout fund helped Dafu Technology out of trouble,and then examines the effect of the bailout in terms of changes in equity pledge risk,market performance,financial performance and other aspects.The analysis shows that the introduction of state capital bailout has enhanced the company’s blood generation capacity in terms of improved governance structure and strategic synergies through complementary resources.In the short term,Dafabet has resolved its equity pledge risk,but it will have to rely on its own operation to counteract the long-term risk.However,it will take a long time to verify.In other respects,the bailout fund has also boosted employment in Bengbu and accelerated the development of the 5G industry,contributing to local development.In conclusion,the paper concludes that the state-funded bailout of Dafu Technology can alleviate capital pressure,resolve the company’s equity pledge crisis and enhance the company’s financing ability,with a positive impact on the company’s performance,while taking into account the interests of both parties in the design of the bailout package.It also makes recommendations for future bailout financing for private listed companies.It provides some experience and reference for other private listed companies to introduce bailout funds to get out of difficulties,and also provides reference for local governments and financial institutions to provide bailout.