Category: Money tips Release Date: 2006-02-04
Since last year by the end of April onwards, in order to promote the share-trading reform to address the historical issues securities markets, the market suspended the financing function. Since then, the Shanghai and Shenzhen stock started to change the number of companies at home has reached 896, accounting for 70.81% of the total market capitalization, accounting for the proportion of the total companies in Shanghai and Shenzhen reached 66% (as of May 8). Non-tradable shares of listed companies tradable shares, and divided most of the pattern has been resolved to promote the common interests of two types of shareholders, based on the formation of a new mechanism has begun to play a role. Refinancing of listed companies at this time restore function is not only conducive to further promoting the share reform of listed companies, but will be those who have completed share reform, and have good prospects for the development of listed companies to provide direct optimization and strong support.
In the "new old" after the refinancing issue, the regulators want to persist in reform and development of market stability and maintenance of the principle of combining active and steady, incremental progress, and hope to maximize the immediate expansion without increasing the pressure to reduce the market expansion of psychological pressure on the stock market under the premise of this work. The market also hope that through innovative financing methods, both to meet the financing needs of listed companies to improve their business performance, but also to maximize ensure that the market basically stable. No doubt, as an innovative financing of equity warrants can be met those requirements.
Equity warrants by the warrant issuers of the underlying assets, help to increase relevant assets attractive to investors, the exercise of warrants being obligations of listed companies in accordance with the agreement price to the warrant holders to sell shares. Through the issuance of equity warrants, so that potential buyers of the stock market, investors bid the way through the market first, equity warrants or purchased by the original shareholders of listed companies to distribute for free access, and then exercise the option to get the underlying stock, which can be effective to finance. As an innovative modes of financing, equity issuance of warrants listed companies such as refinancing process, has the following advantages:
(1) Equity warrants will help to identify the old shareholders of equity securities. The process through the introduction of additional warrants, the old shareholders, if unwilling or unable to subscribe for the subscription rights may be able to assign the other investors in order to subscribe for stock options ultimately rests with investors interested in the hands, thereby increasing listed companies, the additional subscription rate.
(2) Equity warrants may be to some extent compensate for the loss of the old shareholders. Through the introduction of additional warrants, despite the transfer of the phenomenon of interest still exists, but because of the introduction of warrants to enhance the company's market value, allowing listed companies to have the ability not to reduce their own interests and the vested interests of minority shareholders under the premise of the appropriate compensation for small shareholders, which will help to change the shareholders of the issuance of the process of a disadvantage, elimination of additional information on listed companies and the resulting adverse impact on the systemic risk.
(3) Equity warrants actually in the process of refinancing provided a market-oriented price correction mechanism. As the holder of a warrant are right and not obligations, so that investors may be based on market trends to determine whether the right lines, so as to provide additional pricing reasonable test of a market-oriented mechanisms; and since the right time and the number of lines are there is great uncertainty, which no doubt have increased the costs and risks of price-fixing, to some extent inhibited the occurrence of the phenomenon of price-fixing.
(4) Equity warrants also provide an effective post-restraint mechanism. After the introduction of warrants issued, as listed companies and their major shareholders and investors whether the warrants before the expiry of the implementation is closely related to the validity period and therefore warrants listed in the company's management and its largest shareholder is usually harder to enhance the market value of listed companies and to restrict any behavior detrimental to a company's value. But also through warrants the implementation of a phased distribution and divergence, but also to raise funds in place in batches according to demand, reducing the opportunity cost of idle fund-raising, and can reduce the fund-raising by listed companies to randomly change the orientation of risk.
In the stock restructuring essential for the success has been made of listed companies through the issuance of equity warrants to conduct such re-financing, you can effectively improve the allocation of capital market functions, the social funds are spent effectively translated into long-term investment, improve resource use efficiency and capital efficiency. "Listed company's securities issued Management Measures" on May 8, 2006 the formal implementation of the approach for the future refinancing of listed companies conducted a detailed requirements and give more autonomy to the issuer, to encourage innovative thinking to promote refinancing the start, regulators, and said that in re-financing the first phase, the focus does not encourage the capital markets warrants immediate pressures created innovative ways. Currently on the market relatively mature financing package will take a few G Electric launched a long Equity warrants refinancing program, which fully take into account the market's demand for refinancing of listed companies and market impact of the follow-up, in line with regulators on the steps of refinancing arrangements and the specific provisions, with a high feasibility, therefore, timely introduction of such warrants the re-introduction of capital financing options, not only to restore equity financing capabilities, and can make progress on work to further develop the securities market to refinance.
