Research On The Effectiveness Of Relief Fund Under High Ratio Of Equity Pledge Risk

Equity pledge is a "pledge debt financing" method,with its advantages of fast and efficient,has become the first choice of many listed companies’ controlling shareholders.According to statistics,almost 99% of listed companies have taken equity pledge financing.In this context,the state introduced a series of rescue policies,encouraging local state-owned assets to lead the establishment of rescue funds to help private enterprises expand financing channels and resolve the liquidity crisis.However,the process has not been smooth,with some targets only temporarily alleviating the liquidity crisis,but not in the long term,and the rescue funds difficult to exit.Therefore,many scholars began to study the operation mode,motivation and mechanism of bailout fund.Since the bailout fund has been applied in China for a short time and relevant case studies are not sufficient,there is no conclusion on how to achieve the best bailout effect.This paper adopts the literature research method,case analysis method,etc.,firstly sorts out the basic concepts and theories related to equity pledge and rescue fund,and then summarizes the existing rescue literature of CNKI,and finds that the rescue effect is different under the condition of different proportion of equity pledge.Specifically,enterprises with more than 80% proportion of equity pledge,Its rescue effect is not as good as that of enterprises with equity pledge ratio between 60% and80%,which is reflected in three aspects: the declining proportion of equity pledge,solvency and short-term market reaction.This is because different share pledge ratios face different financial risks,which will affect the extent to which rescue funds and other financing institutions can finance them.However,further comparison shows that some enterprises with equity pledge ratio of more than 80% can also obtain better rescue effect.This paper takes Changxin Technology,whose equity pledge ratio is as high as99.49% before the bailout,as an example,hoping to find some extendable bailout experience by sorting out its bailout motivation,bailout program and bailout effect.The research found that after the introduction of Tieyuan investment,the share pledge ratio of Changxin Technology decreased to 33.84%,and the solvency and profitability were greatly improved.The successful rescue experience of Changxin Technology can be summarized as follows: first,the rescue amount is large,higher than the average rescue amount of the market;Second,the rescue plan is excellent.It introduces state capital through equity transfer,improves the governance structure,strengthens the strategic coordination,and brings industrial chain advantages for it.Third,on the basis of the original rescue plan,continue to provide help,including full subscription to its convertible bonds and government subsidies increased year by year;Fourth,the core competitiveness of Changxin Technology is prominent,R&D investment and the number of patented technologies increased substantially;Fifth,Changxin Technology Firm in the industry in line with the bailout screening criteria,benefited from the industry boom recovery,performance improved significantly.To sum up,this paper suggests that the rescue fund in the future rescue practice,further improve the screening indicators,"good steel in the knife edge",screening companies with core competitiveness and in line with the development trend of the country;In addition,the bailout is not only "relief" for a while,we should continue to provide follow-up assistance,improve their self-hematopoietic ability;Finally,the rescue plan should be discussed "case by case".On the basis of not affecting the independent management rights of the management,relevant help should be provided,and improper investment behaviors should be reasonably supervised to promote the healthy development of private enterprises.