What is the significance of private placement What is private placement

Private placement A non-public offering is an offering to a specific investor, also known as a private placement, which is actually a common overseas private placement.

Stock issuance China** has always been based on incremental issuance, and "stock issuance" is generally implemented in overseas markets. The former is the issuance of new shares by the company that has been issued after a certain period of time to expand its share capital; The latter means that the joint-stock company does not issue new shares, but only sells the shares of the original old shareholders to market investors.

Incremental issuance is divided into two types: paid and unpaid, which mainly includes allotment of shares and additional issuance to the public; Free of charge is a share gift.

IPO is an abbreviation for Initial Public Offerings**. An initial public offering (IPO) refers to a company.

For the first time, a company makes its stake available to the public**. Generally, once the IPO is completed, the company can apply to be listed on the stock exchange or ** system.

Since June 2004, China's first initial public offering (IPO) and additional issuance have died down, the primary reason is to ensure the smooth and stable share reform. According to the statistics of China Securities News in early January, the total market value of the first share reform company has reached 100 million, accounting for the proportion of the total market value. Previously, authoritative sources said that more than half of the share reform company and market value are important signs of the success of the share reform, and it is also one of the basic conditions for restarting the first issuance.

According to this, the industry believes that the "new and old division" may not be far away.

The division between the old and the new is to delineate a point in time, after which the initial public offering company's ** no longer distinguishes between listed and temporarily uncirculated shares.

1] The additional issuance, allotment of shares, and bond issuance of listed companies all belong to the scope of the concept of refinancing.

2] Additional issuance: refers to the act of re-issuance of ** by a listed company for the purpose of refinancing.

3] Private placement: It is a form of additional issuance. It means that when a listed company issues additional shares, the object of its issuance is a specific investor (not if you have money to buy).

4] In a mature market, listed companies always implement additional issuance plans when the value is equal to the market or overvalued by the market; And implement a buyback program when the value is undervalued by the market. This is a rational increase in issuance that follows the law of value and conforms to the logic of the market economy. Because the implementation of additional issuance when the market is lower than the value of the company, it is tantamount to a exploitation of the company's original shareholders, and of course it is a harm to the interests and investment confidence of small investors in the secondary market.

Primer: Investment skills for private placements.

Why do listed companies need private placements and what is the significance?

Private placement is the issuance of bonds or ** to specific investors. Private placement is a kind of additional issuance, sometimes called "private placement" or "private placement". Private placement takes advantage of the market-oriented valuation premium of the listed company, that is, relative to the book value of the parent company's assets, the assets of the parent company are amplified through the capital market, so as to increase the asset value of the parent company, and for the group company with a low holding ratio, the control of the listed company can be further strengthened through the private placement.

Private placement refers to the non-public issuance of shares by a listed company to a small number of qualified specific investors. Its issuance** is determined by the bidding of investors participating in the additional offering, and the issuance procedure is more flexible than that of the public offering. It is generally believed that this financing method is more suitable for enterprises with small financing scale and high degree of information asymmetry.

There are two situations in which a private placement occurs: one is that a large investor wants to become a strategic shareholder of a listed company, or even a controlling shareholder. In the past, there was no private placement, and they could only buy equity from major shareholders if they wanted to buy shares, and the money taken out by the new shareholders went into the pockets of major shareholders, which had little direct effect on strengthening listed companies.

The other is to merge and acquire others through private placement financing to rapidly expand the scale.

The private placement complies with the regulatory requirements of the China Securities Regulatory Commission for listed companies, fundamentally avoids related party transactions and intra-industry competition between the parent company and the listed company, and realizes the complete financial and operational autonomy of the listed company. In addition, private placement can be used as a new means of mergers and acquisitions to promote the growth of high-quality leading companies through mergers and acquisitions.

Private placement, also known as non-public offering, that is, issuance to specific investors, is generally considered to have the same as common private equity investment.

Private placement has great investment opportunities, and the private placement issue price is often at a certain discount compared with the secondary market, and the private placement of funds is conducive to the development of listed companies, which in turn will help the stock price of listed companies, so now more and more private equity products are participating in private placements, hoping to get money from them. The investment in the issuance of additional issuance has become a hot spot for investors, and more and more private placements are keen on private placement.

1. Private placement is a kind of additional issuance, and it refers to the non-public issuance of shares by listed companies to a small number of qualified specific investors. The private placement requires that the issuance object shall not exceed 35 people, the issue price shall not be less than 80% of the market price, and the issued shares shall not be transferred within 12 months.

2. Private placement includes two situations: one is that a large investor (such as foreign capital) wants to become a strategic shareholder of a listed company, or even become a controlling shareholder. The other is to merge and acquire others after private placement financing, such as a sedan car to rapidly expand its scale.

Private placement refers to a non-public offering, that is, the issuance of new shares to specific investors, institutions, and institutions, which is actually a common overseas private placement. Private placements are directed at specific institutions, and their purpose is often to introduce specific capabilities of the institution, such as management, channels, and so on. The objects of the private placement can be old shareholders or new investors.

In short, after the completion of the private placement, the company's shareholding structure will often change greatly, and even the controlling interest will change.

The private placement is the result of negotiation between the issuer and the subscriber, and the subscribers are generally limited to a small number of institutions or individuals with funds.

Why do many companies choose private placement?

"Private placement is the fastest way to achieve results. ”Relevant sources said. "High efficiency, fast effect, and low pressure on **. A representative of a ** affairs thinks.

A senior investment banker analyzed that in addition to the faster issuance speed, private placement is often less risky than public issuance. He explained that the pricing of the public offering needs to refer to the market price, which should not be lower than the average price of the company in the 20 trading days before the announcement of the letter of intent or the average price of the previous trading day; The private placement method can be set as the date of the announcement of the board of directors' resolution, and for institutional investors, there is a chance to complete the subscription at a lower level, so the probability of the issuance being supported will be greater.

In addition, with the private placement method, "the commission of the brokerage underwriting is about half of the traditional method." A source from a listed company revealed. "There are a lot of savings. ”

Not only that, "private placement is helpful for achieving the overall listing, increasing the shareholding ratio of controlling shareholders, and introducing strategic investors." In addition, it is also relatively convenient to communicate with institutional investors. The above-mentioned investment bankers added that this financing method may account for a large proportion in the future, and for high-quality companies, it may be more inclined to use private placement.

In addition, for some companies with a track record that fail to meet the conditions for public financing, but are facing significant development opportunities, private placement will also be a key financing channel.

A brokerage firm's report also mentioned that private placement has a positive effect on amplifying the value of the parent company's assets through market valuation, avoiding related party transactions and peer competition, and as a means of mergers and acquisitions to reduce cash flow after mergers and acquisitions.

Private placement can be directly checked on the China Securities Regulatory Commission, private placement refers to the non-public issuance of shares by listed companies to a small number of qualified specific investors, which requires that the issuance object shall not exceed 10 people, and the issue price shall not be less than 90% of the market price of the 20 Weichaishan transactions before the announcement, and the issuance of shares shall not be transferred within 12 months (within 36 months after subscription becomes a controlling shareholder or has actual control).

In the "Measures for the Administration of Refinancing" (draft for comments) issued by the China Securities Regulatory Commission in 2006, there are no other conditions for non-public offerings, except for stipulating that the issuance object shall not exceed 10 people, the issue price shall not be lower than 90% of the market price, the issuance of shares shall not be transferred within 12 months (36 months for major shareholders to subscribe), and the use of funds raised shall comply with national industrial policies, and listed companies and their executives shall not have violations. Even loss-making companies can apply for issuance.

There are two types of private placements: one is that a large investment refers to a Chinese investor (such as a foreign capital) who wants to become a strategic shareholder of a listed company, or even a controlling shareholder. In the past, there was no private placement, and they could only buy equity from major shareholders (such as Morgan Stanley and the International Finance Corporation jointly acquired the equity of Conch Cement), and the money taken out by the new shareholders went into the pockets of the major shareholders, which had little direct effect on strengthening the listed company.

The other is to acquire others after private placement financing to rapidly expand the scale.

Extended information: How long does it take for the CSRC to accept the additional issuance until it is approved.

I can't give a specific time, because there are many steps to go through.

There are still 48 days to complete the fixed increase from today, and 48 days is the longest time, and any 1 day during this period can be completed in a mega.

Private placement refers to the way in which the company obtains funds by issuing new shares to specific investors instead of issuing new shares to all shareholders in accordance with the requirements of the ** exchange. The purpose of private placement is to obtain funds to meet the capital needs of enterprises, which usually involves some important capital investments, such as new R&D projects, purchase of equipment, development of new products, etc.

First of all, the enterprise needs to submit an application for private placement to the ** exchange, including the reason and purpose of the private placement, the number of additional shares, **, and the identity of the transferee and other information. Secondly, the ** exchange will review the application, and after confirming the transferee and **** of the private placement, it can officially start the private placement. The company will issue new shares, and the transferee will purchase new shares in accordance with the requirements of the ** exchange and complete the private placement.

Private placement is a common financing method, which can help enterprises quickly obtain funds to meet the capital needs of enterprises, but there are also certain risks in private placement, investors may face risks such as volatility and market changes, therefore, when conducting private placement, enterprises and investors need to act cautiously and carefully consider risk factors.

The advantage of private placement is that it can quickly obtain funds, meet the capital needs of enterprises, and help enterprises achieve greater development. First of all, private placement can provide rapid financing for enterprises, so that enterprises can quickly obtain funds to meet the capital needs of enterprises, without waiting for traditional financing channels, thereby greatly improving the financing efficiency of enterprises. Secondly, private placement can help enterprises achieve long-term development, for example, it can be used to purchase equipment and develop new products, so as to promote technological innovation and product innovation of enterprises and achieve long-term development of enterprises.

Although private placement can provide rapid financing for enterprises, it also comes with certain risks. First of all, investors may be exposed to the risk of volatility, and investors may incur losses due to changes in the market; Secondly, in the process of private placement, the transferee may face the problem of information asymmetry, and if the company does not provide sufficient information to the transferee, the transferee may suffer losses; Private placements may also bring about corporate governance issues, as private placements may lead to equity dispersion and affect corporate governance.

When conducting private placements, both companies and investors need to exercise caution and carefully consider the risk factors. First of all, before the private placement, the enterprise should submit a complete application to the ** exchange, including the reason and purpose of the private placement, the number of additional shares, **, and the identity of the transferee and other information; Secondly, when buying new shares, investors should carefully understand the company's situation and carefully consider risks such as volatility and market changes to avoid losses.