The Main Way Encouraged for Mergers and Acquisitions of State-owned Enterprises
Transfer as a whole. The restructuring enterprises, in principle, shall conduct public transfers, and implementation of bidding, auction and listing through entering the property rights trading center. The state-owned property rights or state-owned assets of the restructuring enterprises can be transferred, in accordance with relevant procedures, under agreement. Under the premise of proper placement of the employees, the state-owned property rights or state-owned assets are allowed to be transferred through a variety of forms covering acquisition as a whole, partial acquisition, rent-to-buy, and renting with other parts acquired, by extra-territorial capital and private capital.
Equity transfer. For restructuring of share capitals of listed joint stock companies, relevant provisions shall be followed to transfer the state-owned shares through reduction and to totally or partially transfer the state-owned shares of the unlisted joint stock companies. The capital structures of the joint stock companies are to be adjusted through shares realization, asset transfer, and stock exchange, to improve the ability to refinance.
Restructuring with investment. The large and medium-sized state-owned and state holding enterprises with good asset quality, prominent principal work, and strong core competitiveness can realize diversification of property rights through transferring property rights to foreign capital, private capital, and natural person capital, or investment, joint venture, cooperation and so on.
Separation and Restructuring. The enterprises in status of ceased production, semi-ceased production, or trouble in production and management, with difficulty in transferring as a whole, may, through consultations with the main creditors, separate effective assets with corresponding obligations and transfer the state-owned property rights to the employees or private capital, with the original parent company being bankrupt and liquidated in accordance with the law.
Mergers and acquisitions. M&A of restructuring enterprises by foreign capital and private capital is promoted in a variety of ways. Debt-bearing merger means that the merging party takes over the assets of a company with undertaking the debts of the company as the condition, when the company¡¯s assets and debts are equivalent in value; share-absorbing merger means refers to conversion of the net assets of the restructuring enterprise and investment in the merging party as a shareholder thereof; shareholding merger refers to holding the majority part of the shares of the restructuring company through acquisition of its shares.