Case Analysis of Northeast Expressway’s Spin-off and Go Public
|Title||Case Analysis of Northeast Expressway’s Spin-off and Go Public|
Northeast Expressway Company which is jointly funded and set up by Heilongjiang Provincial Expressway Corporation and the Jilin Provincial Expressway Group Limited and the transportation economic development center limited successfully listed in 1999. Because of the three big shareholders was not absolute control positions, a mutual triangle ownership structure formed. It is known as the listed company governance structure model. At the same time as the Northeast Expressway has a stable source of income, it has been hailed as the” money machine”. But such a company was paralyzed in operation for ten years. The company has happened that contending for a board seatăsnatching operation rightăillegal investingămanagement struggling for power. China Securities Regulatory Commission sent letters to urge its improvement many times. It was exchanged a special treatment in 2007 by the Shanghai stock (ST). As the major shareholder of the company of interest conflicts, corporate governance chaos, business government imbalance caused the company to halt, therefore, for the ultimate solution to the problem, the two major shareholders are thoroughly isolated and split. In 2010 the Northeast Expressway in the superior regulatory approval was formally divided for Heilongjiang Traffic Development Company Limited and Jilin Expressway Company Limited .Northeast Expressway formally withdrawn from the market and became the first division Chinese”A”stock market listed company.Why once known as the governance model, did the Northeast Expressway become the first problem company in”A”stock market for the corporate governance. Why was not the Northeast Expressway eventually able to escape the spin-off of fate after special treatment? Why did the Northeast Expressway solve the dilemma using discrete market strategy? Whether can we copy Northeast Expressway’s division ? Northeast Expressway separation listed is only a discrete listed case in the current”A”stock market. Through this case, on the one hand, The Northeast Expressway lead to a series of deep analysis because of the company governance structure, supply the relevant experience and lessons to other enterprises to improve corporate governance. On the other hand, we can enrich the theory of discrete listed. Although the copy of the Northeast Expressway listed practice is worth discussing, but it can provide certain theoretical basis and reference for other companies. Based on analyzing the relevant data, summed up the Northeast Expressway in conflicts caused by interest difference, corporate governance structure chaos, business in disequilibrium, development stalled and other problems, the differences of interests balance between large shareholders, ownership structure, and executives generating means, so that stakeholders exists between the potential conflicts of interest, and the potential contradictions among stakeholders .They led them to the intense conflict and caused the loss, thus hindered the development of the company, and damaged the interests of middle and small investors. In order to solve the above problem, the Northeast Expressway has to spin , as the basis of Heilongjiang high, Jilin high speed. At the same time the combination of the company division theory and the Northeast Expressway discrete listed practice, Analysis the Northeast Expressway discrete listed practice in-depth application of the company division theory and better understand of the Northeast Expressway from three options. Firstly, it is split into two listed ompanies, shareholders of the two respective dominant by self; Secondly, one of listed companies withdraws from the stock market; Last, all of three exit, the shell will be sold Choice of separation is relatively favorable split mode for two major shareholders.Through empirical research, analysize the development history of the Northeast Expresswayăthe corporate governance structure statusăproblems and causes before the division,Through literature review, analyzing and summarizing the theory of division of the company, provide a certain theoretical basis for the listed company for Northeast Expressway separation strategy selectionădraw lessons from theory of separation, absorptionăanalysis of the Northeast Expressway discrete listed strategies in-depth, this paper draws the following conclusions and enlightenment:First, equity balance must be cautious. Can’t ignore that environment validity effect on finishing the company structure. Ownership structure must be combined with enterprise’s management environment. Choose the environment governance structure to guarantee the stable running of enterprises. Second, strictly regulate the listing process. Listed companies application procedures. Strengthen the supervision on the management of listed companies. Make comprehensiveăaccurate assessment for company before listing companies in the approval required prior to the application .Third, strengthen supervision and punishment on the listed company. Regulators must take active supervision and punishment measures in order to maximize the protection of the state and the interests of the shareholders; Fourth, actively seek the root of the problem. When a listed company appears problem, internal executives should search for the root of the problem and take timely measures and an antidote against the disease; Fifth, choose solutions according to the actual. When the listed company can not cast off predicament, they should choose to merge or split inspecting particular case, but not seek to find ways just from the existing solutions. The separation listing of the Northeast Expressway created the precedent of”A”store market listing. And for the other listed companies to provide some reference to solve the dilemma. Regulators worry that if they let discrete listed gate, it may lead to listed companies to obtain discrete listed shell resources and develop blindly diversified. So listed companies listed will be discrete regulatory control.
|Subject||carve-out, LTD, Northeast Expressway Co., spin-off and go public,|
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