Port communicationHong Kong Xintong-Today I will introduce to you what are the capital operation models commonly used by Chinese companies before going public.，Let’s learn together! one、Mergers, Acquisitions and Reorganizations Mergers and Acquisitions and Reorganizations，that is, merger、acquisition。Generally refers to the effect of market mechanism，Equity trading activities undertaken by an enterprise to obtain control of another enterprise。Mergers, acquisitions and reorganization can revitalize enterprises、The goal of revitalizing the company’s existing assets。
Mergers, Acquisitions and Reorganizations of Chinese Enterprises，Payment methods such as cash acquisition or equity acquisition are often used for operations.。Common methods of mergers, acquisitions and reorganizations include：1、Fully accepting mergers, acquisitions and reorganization means absorbing the assets and debts of the acquired company as a whole，Divestiture after full acceptance，Revitalize existing assets，Liquidate non-performing assets，Turn losses into profits after a series of restructuring efforts。
This method is more suitable for competitors with similar industrial relationships and companies with upstream and downstream production chain relationships.。2、divest bad assets，Transfer all high-quality assets，The original company was deregistered and the acquiring party only accepted the assets of the merged company.、Technical and partial personnel，The merged company uses the transfer money to appease the remaining employees(Selling off seniority)、Find your own way out after disposing of the residual value of the enterprise。
In this way, the acquiring party must have certain cash payment capabilities.，And it can only be implemented without assuming the debts of the acquired party.。two、Equity investment Equity investment means that the investor owns the equity of the investee through investment，The investor becomes a shareholder of the investee，Enjoy the rights and interests in proportion to the shares held and bear the corresponding responsibilities and risks。Common equity investment methods are mainly divided into two types: tradable stock transfer and non-tradable stock transfer.。
- Transfer of tradable shares. Public tradable shares transfer model is also called open market mergers and acquisitions.，That is, the acquirer acquires the shares of a listed company through the secondary market，The act of obtaining control of a listed company。In Western developed countries with relatively mature securities markets,，Most mergers and acquisitions of listed companies are carried out through the transfer of circulating shares.。
And in China，Due to the unreasonable shareholding structure of listed companies、Current regulations have strict regulations on the acquisition of tradable shares in the secondary market.、The stock market is too small，There is a huge accumulation of external funds in the stock market，Restrictions caused by factors such as excessive stock prices，It is not very feasible for Chinese enterprises to acquire listed companies through the secondary market.。
- 非流通股转让股权协议转让，即并购公司根据股权协议转让价格授让目标公司全部或部分产权，从而获得目标公司控股权的并购行为。股权转让的对象一般指国家股和法人股。股权转让既可以是上市公司向非上市公司转让股权，也可以是非上市公司向上市公司转让股权。
This model is well-defined due to its objects、Convenient equity transfer，Regardless of the feasibility、Ease of operation and economy，The public share equity agreement transfer model has significant advantages.。three、In the share-absorbing merger and acquisition model, the owners of the merged enterprise invest the net assets of the merged enterprise as stock funds into the acquiring party.，Become a shareholder of the acquiring party。After merger，The legal person status of the target enterprise no longer exists。
In this mode，Enterprises in the process of mergers and acquisitions，No cash flow involved，Financing problems avoided。The share-absorbing merger and acquisition model is often used by the controlling parent company to "backdoor listing" its assets through listed subsidiaries.，Avoids the quota management of the current market。Four、Asset replacement reorganization model enterprises based on future development strategies，Use assets that are of little use to the company's future development to replace assets needed for the company's future development.，This may lead to substantial changes in the company's property rights structure.。
through this mode，There is no need for cash flow between mergers and acquisitions，The acquiring party does not need to pay or only need to pay a small amount of cash，Greatly reduces merger and acquisition costs。And can effectively adjust existing assets，Eliminate assets that have little impact on the company's overall earnings，Inject the other party’s high-quality assets or assets that are closely related to your own industry，Can more directly change the business direction and asset quality of the company，and does not involve changes in corporate control。
but，The shortcoming of this model is that under the conditions of insufficient information exchange,，Difficulty finding a suitable replacement partner。five、Debt-for-equity model The debt-for-equity model refers to the merger and acquisition company converting the bad debts of the company that were unable to repay the debts of the merger and acquisition company into equity as an investment in the company.，if needed，Further additional investment to achieve the purpose of holding shares。
debt-to-equity swap，It can solve the capital shortage caused by state-owned enterprises due to defects in the investment system.、The “congenital shortcoming” of excessive debt ratio，Suitable for China’s national conditions。For the acquirer，It is also a way to change from passive to active.。six、Joint venture holding model Joint venture holding model is also called capital injection and shareholding，That is, the acquiring party and the target enterprise each contribute capital to establish a new legal entity.。
The target company uses assets、Investment in land, etc.，M&A relies on technology、funds、Management and other investment，Holding a controlling position。The target company’s original debts will still be borne by the target company itself.，The form of repayment is mainly dividends from newly established enterprises.。in this mode，Enterprises can control a large amount of capital with a small amount of capital，Save control costs。
in addition，By divesting the operating assets of the target enterprise and
Advantages
joint venture，Effectively avoids the accumulation of historical debts and hidden liabilities of the target company、潜亏等财务陷阱。but，In this mode，此种只收购资产而不收购企业的做法易招来非议。seven、在香港注册后再合资模式在香港注册公司，然后将国内资产并入位于香港的公司，可为公司今后的上市打下坚实的基础。
如果企业存在资金短缺，又难以从国内银行贷款，可以选择在香港注册公司，借助在香港的公司作为申请贷款或接款单位，以国内的资产作为抵押品， 向香港银行申请贷款，然后以投资形式注入合资公司，当机会成熟后可以申请境外上市。
In this way，合资企业生产的产品，可以较易进入国内或国外市场，创造品牌，从而获得较大的市场份额。at the same time，Hong Kong companies are global operating companies，Registered address overseas，No restriction on business location，Can conduct business abroad or in various domestic regions，We can also set up offices in various places、Commercial Office and Branches。
in addition，Since Hong Kong companies have no business scope restrictions，Enterprises can carry out import and export、Re-export、manufacture、Investment agency and other services。eight、Equity split for high-tech companies，Instead of pursuing elusive listing financing，It is better to divide the equity into smaller shares，Equity exchange for capital，Get the blood you need to thrive。
actually，Similar practices are also common in Western countries，Even Microsoft Corporation of the United States，The same path was taken at the beginning - high-tech companies were looking for financial partners.，Then launch the product or technology，Achieve realistic profit returns，This is almost an inevitable process before becoming a listed company.。Nine、A leveraged buyout is an acquisition company's use of operating income from the target company's assets.，to pay the merger price or as security for such payment。
In other words，Buyout companies don’t have to have huge amounts of money，In addition, the assets and operating income of the target company are used as financing guarantees、The amount borrowed from the source of repayment funds，Can merge companies of any size，Since this acquisition method is similar to leverage in terms of operating principle,，hence the name。Leveraged buyouts emerged in the United States in the 1960s，developed rapidly after，80has become popular in Europe and America。
ten、Strategic Alliance Model Strategic alliance refers to two or more enterprises with equal strength.，To achieve common ownership of the market、Strategic goals such as shared use of resources，formed through various contracts
Advantages
Look alike、risk sharing、A loose network organization with two-way or multi-way flow of elements。Transfer of mutual learning based on various aspects of the partnerships that make up the alliance，Different degrees of co-creation of knowledge，Traditional strategic alliances can be divided into two types - product alliances and knowledge alliances。
eleven、Investment holding, acquisition and reorganization model: listed companies invest in acquired companies，Thus reorganizing it into a merger and acquisition of a subsidiary of a listed company。This is a form of relative or absolute control in the form of cash and asset shares.，Can realize the purpose of controlling other enterprises with a small amount of capital and owning them for me。
This type of merger
Advantages
Listed companies can expand their asset size through investment holding，Promote equity expansion，Increase fund raising，Make full use of its "shell resources"，Circumvents the initial listing procedures and corporate “packaging process”，Can save time，Improve efficiency。
In summary，The capital operation methods of enterprises before listing include mergers, acquisitions and reorganizations.、Equity investment、Acquisition of shares、asset replacement reorganization、Exchange debt for equity、Joint venture holding、Equity split、leveraged buyout、Strategic alliances and other models，Enterprises can choose the appropriate operating mode based on their own actual conditions，To protect the interests of shareholders，It does not affect the purpose of listing the company。If you still need to know more about this，You are welcome to consult Hong Kong Xintong at any time!
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