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On the optimization and adjustment of the capital structure of state-owned listed companies

Author: EJiaZuo From: www.yourpaper.net Posted: 2009-08-04 22:33:07 Read:
[Paper Keywords] capital structure of state-owned enterprises listed companies
[Abstract] capital structure refers to the composition of various corporate capital and its proportional relationship. Constitute the most basic of corporate capital structure is the liabilities and equity. The capital structure is not independent of the main body, it is influenced by many factors. This article describes the status of the state-owned listed company's capital structure, propose solutions, as well as the specific implementation process should pay attention to the problem.


, The optimal capital structure of listed companies optimize standard
Corporate capital structure optimization should be unity as standard to maximize their profits and investors to maximize return on investment. To maximize their profits and investors investment income to maximize the ability unified as a standard? In fact, due to the prevalence of phase separation of ownership and management of real economic life in the capital, so the two are not uniform, enterprise managers can use their power to develop their favor profit distribution plan, makes the enterprise even if reached maximize profits, investors can not get the maximum return on investment. Especially in the case of our internal governance structure and securities markets are not perfect, there are operators in the formulation of the profit distribution plan has too much power, the mechanism for the protection of small investors are not perfect, and the majority of shareholders of speculative arbitrage over preference issues such unreasonable incentives have not been extensive knowledge of all the operators to make damage to the interests of shareholders as possible. That analysis, you can determine the standard optimization of the capital structure of listed companies in China should be: to maximize their profits and investors to maximize return on investment double standard unified.

Second, the state-owned listed companies in the capital structure of the status quo
(A) The liability structure is unreasonable, the high level of current liabilities. Liability structure is an important aspect of the company's capital structure, the total assets of the listed company debt ratio is lower than the national average, but its current liabilities to total assets ratio and the national average is closer. Mainly because the listed company's net cash flow is insufficient, resulting in excessive short-term debt. The high level of current liabilities listed companies will change in the financial market environment, thereby increasing the listed company's credit risk and liquidity risk.
(B) the proportion of state-owned shares. Listed companies in China state-owned shares (state shares and legal person shares) ratio of more than 60%, the proportion of state-owned shares is too large, and there is no state-owned asset constraints and oversight mechanisms, bound will be the formation of insider control, difficult to form an effective company governance structure. Option excessive concentration of minority shareholders is limited in power, damage to the interests of minority shareholders, fueling speculation largest shareholder and stock market manipulation. Affect the capital structure of the corporate governance structure, equity overly centralized, enterprise phenomenon becomes owner of the intervention makes the traditional government intervention corporate phenomenon, practice the continuation of the old system.
(C) inter-industry capital structure differences. Divided into a class of business units with the economic activities of the same nature in accordance with the standards of China's statistics. Due to the different nature of the economic activity in the industry, the operations of its own funds and external funding needs are different, have different capital structure.

Third, the capital structure of listed companies of different industries adjustment measures
There are two ways: incremental adjustments and stock adjustment capital structure adjustment. Inventory adjustment as the main reason. The capital structure of state-owned enterprises in China, there are many unreasonable, irrational stock structure. Specific measures are as follows:
(A) for the problem of excessive current liabilities, the implementation of the debt-equity swap
The so-called debt-equity swap, the country's financial asset management companies in the process of legally dispose of non-performing assets of Bank of original, on the part of the corporate bank loans, financial asset management companies as investment entities to implement a debt-to-equity. The debt to equity of the original claims and liabilities of banks and enterprises, financial asset management companies and enterprises into shareholding and shareholding or controlling relationship is holding the original debt service transition to Angufenhong to. For the debt-equity swap can be met through the following two steps: First, the implementation of the debt-equity swap can be said to be a benefit to the enterprise. Such benefits are reflected in: 1. Debt and equity, debt principal at maturity date; but equity as a permanent investment, no principal.
2. Scheduled interest-bearing debt, corporate earnings or interest expense by financial expenses in the tax deductibility; equity dividend rights, but in after-tax pay, if the companies do not have earnings or earnings is low, equity can not dividends or dividend few . Shows that the first step in the debt to equity, in any case, the enterprise will have a beneficial impact, reducing the debt ratio and reduce interest costs, many companies believe that this country to the enterprise "free dinner" . Secondly, with the conduct of the reform of debt-equity swap, the debt-equity swap of state-owned enterprises, although the short-term to mitigate corporate debt interest burden, reduce the debt ratio, but eventually have to bear the cost of equity capital, the cost of equity capital is higher than the debt capital costs. Thus, the substance of the debt-equity swap is to enable enterprises to make a time difference in the cost burden, the ultimate way out is to raise the level of corporate earnings to compensate for the capital costs. Perhaps, therefore, to prepare for the debt-equity swap at the beginning of the five conditions of the debt-for-equity conversions enterprises, is the second step to complete the debt-to-equity. Because previous studies debt-equity swap business offers from individual income distribution analysis, but the debt-equity swap as a way of debt restructuring, should be combined with other reforms. Debt-equity swap, the asset management company as equity owners as shareholders to participate in enterprise management, reduce the debt ratio at the same time, reduce the interest burden for enterprises, capital structure, significant changes occurred. Accordingly, the amount of research Debts into Shares limit is a very important issue. If a limited number of debt-equity swap, the asset management company as a shareholder, it is insufficient or can not decide and around business management, change their operating mechanism. Visible, debt-equity swap lowest boundaries asset management company should be able to hold enough to affect the shares of the enterprise operation mechanism. (B) too high for the proportion of state-owned shares, the implementation of state-owned shares
The state-owned shares to reduce the proportion of state-owned shares of the total share capital, in order to achieve the optimization of capital structure, the formation of an effective corporate governance structure. The state-owned shares is not so much a technical operation, as it is a political issue. The state-owned shares is not just to reduce the proportion of state-owned shares, but from a dynamic perspective to judge the efficiency of state-owned capital operation, to improve the state capital appreciation. Analysis of the pilot from the state-owned shares, the first step is to reduce the proportion of state-owned shares to 51%, the second step is the state-owned stake to 30%, state-owned capital less scheduling more social capital. State-owned shares combined with the adjustment of the layout of the state-owned economy, which means that not all enterprises are state-owned capital, all enterprises should be the absolute proportion of state-owned capital accounts, but divided the type of business, to take a different mode of state-owned The equity holders manner.

, Listed companies' capital structure optimization should pay attention to the problem
The dynamic process of the development process of China's securities market is also gradually optimizing the capital structure of listed companies in China. According to the characteristics of the capital structure of China's listed companies at this stage, the optimization of the capital structure of listed companies should pay attention to the following some of the problems:
(A) focus on the characteristics of the industry. As can be seen from the front of the empirical analysis, the industry is characterized by the important factors to affect the company's capital structure, different industries showing a different capital structure. The optimization of the capital structure of listed companies, the first to take into account the characteristics of the industry, as well as with industry average condition, on this basis, the return to capital structure for their own development.
(B) make full use of debt financing "tax shield effect." Apart from the few sectors of agriculture and other listed companies in China's tax incentives are gradually losing, which will make the advantage of the tax shield effect "of the liabilities financing gradually unfolded. Listed companies should take advantage of the tax shield effect to increase the company's cash flow, and create more value for shareholders.
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