Compared with ordinary enterprises, the biggest advantage of listed companies is that they can raise funds on a large scale in the securities market, thus promoting the rapid growth of the company's scale. Therefore, the listing qualification of listed companies has become a "scarce resource", and the so-called "shell" refers to the listing qualification of listed companies. Because some listed companies have no complete conversion mechanism, poor management and unsatisfactory performance, they have lost the ability to further raise funds in the securities market. To make full use of this "shell" resource of listed companies, it is necessary to reorganize assets. Shell buying and backdoor listing are two forms of asset reorganization that make full use of listed resources. Backdoor listing means that the parent company of a listed company (group company) realizes the listing of the parent company by injecting its main assets into its listed subsidiaries. One of the typical cases of backdoor listing is Johnson & Johnson Group's "mother" borrowing "child" shell. Johnson & Johnson Group, which was restructured from Shanghai Taxi Company, has a large number of high-quality assets and investment projects. In recent years, Johnson & Johnson Group made full use of the "shell" resources of its listed subsidiary Pudong Johnson & Johnson, and injected its second and fifth subsidiaries into Pudong Johnson & Johnson through three rights issues, thus completing the purpose of backdoor listing of the Group.
Backdoor listing generally involves a large number of related transactions. In order to protect the interests of small and medium-sized investors, it is necessary to fully, accurately and timely disclose the information of these related transactions in accordance with relevant regulatory requirements.
Backdoor listing case
What backdoor listing and backdoor listing have in common is that they are all activities to reconfigure the shell resources of listed companies, both for indirect listing. The difference between them is that a backdoor listed company needs to obtain the control right of a listed company first, while a backdoor listed company already has the control right of a listed company. From the specific operation point of view, when a non-listed company is preparing to buy a shell or go public by backdoor, the first problem is how to choose an ideal shell company. Generally speaking, shell companies have some characteristics: their industries are mostly sunset industries, specifically, their business growth is slow, their profitability is meager or even losses; In addition, the company's shareholding structure is relatively simple, which is conducive to its acquisition and holding.
In terms of implementation means, the general practice of backdoor listing is as follows: first, the group company first divests a high-quality asset and goes public; The second step is to inject the key projects of the group company into the listed company by raising funds through a large proportion of allotment of shares by the listed company; The third step is to inject the non-key projects of the group company into the listed company through the rights issue to realize backdoor listing. Slightly different from backdoor listing, backdoor listing can be divided into two steps: buying a shell-backdoor, that is, first acquiring and holding a listed company, and then using this listed company to inject other assets of the shell buyer through allotment and acquisition.
history
Starting from 1934, the United States began to implement backdoor listing, which became more and more popular because of its low cost and high success rate. During the economic recession, the income of many listed companies decreased and the market value dropped sharply, which created opportunities for other private companies to use this "shell" to go public. In recent years, with the economic reform and opening up in China, many enterprises want to go public overseas. However, due to political factors and complicated procedures, some enterprises will choose to acquire some shell companies in the United States and list them on Nasdaq or new york Stock Exchange. After the bursting of the internet bubble, many internet companies are on the verge of bankruptcy, and their market value is extremely low, which creates more opportunities for backdoor listing.
Edit the implementation of this paragraph.
To achieve backdoor listing or shell listing, we must first choose a shell company, combined with our own operating conditions, assets, financing capacity, development planning and so on. To choose a shell company with appropriate scale, the shell company should have certain quality, not too much debt and bad debts, and have certain profitability and restructuring plasticity. Next, non-listed companies gain a relative controlling position through mergers and acquisitions, and the ownership structure of shell companies should be considered. As long as they reach the controlling position, the merger will be successful. There are three specific forms: a, cash acquisition, which can save a lot of time. In this way, the intelligent software group went public by backdoor, and soon entered the role after the backdoor was completed, forming a good market response. B completely through the replacement of assets or equity, the "shell" is cleaned up and reorganized, which is easy to make the assets, quality and performance of the shell company change rapidly and realize the effect quickly. These two methods are used in combination. In fact, most of them are listed by borrowing "shells" or buying "shells". Non-listed companies re-control shareholders, and through the reorganized board of directors, clean up and reorganize listed shell companies, divest non-performing assets or rectify the original operating conditions and performance of shell companies.
Edit this case
PCG Digital Power1999 In April, Li Zekai's PCG Development Company, which was listed on the Singapore Stock Exchange, injected its assets, including the Cyberport Development Right, into the listed company Dexinjia and obtained about 60% equity. Stimulated by the news, Dexinjia's share price rose from less than 0. 1 Hong Kong dollar to single digits, up dozens of times. Later, Xinjia changed its name to PCG Digital Power. In May 2004, PCCW spun off its real estate business, including North Shawan (the real estate part of Cyberport), Beijing PCCW Center, PCCW Center, other investment properties and related property and facility management companies, and injected them into the listed company Dongfang Gas, renamed PCCW Dayan Real Estate, and reduced its shareholding in Ying Da Real Estate through rights issue, cashing in about HK$ 300 million. Johnson Johnson borrowed a shell. Johnson & Johnson Group was restructured from Shanghai Taxi Company, with a large number of high-quality assets and investment projects. In recent years, Johnson & Johnson Group made full use of the shell resources of its listed subsidiary Pudong Johnson & Johnson, and injected its second and fifth subsidiaries into Pudong Johnson & Johnson through three rights issues, thus completing the purpose of backdoor listing of the factory group.