China OKs More Mergers in June
(Beijing) — Mergers of Chinese-listed companies picked up in June, signaling the securities regulator may allow more publicly traded firms to improve their quality through consolidation, at least in the near term, industry watchers say.
Last month, the China Securities Regulatory Commission (CSRC) gave the green light to 24 listed companies to merge, acquire or restructure their businesses. It was the highest monthly total since the beginning of this year.
Most of the approved plans were reverse mergers or so-called backdoor listings, in which unlisted assets are injected into another publicly listed shell company.
Industry watchers believe the increase of approvals is in line with the CSRC’s latest policy direction.
Liu Shiyu, who became the head of CSRC in March, has been prioritizing reforms to improve the quality of listed companies and their information disclosure.
“Brokerages cannot just focus on businesses like underwriting and sponsoring. They should also put more efforts in facilitating corporate M&As and restructuring to rejuvenate the market,” Liu said at a meeting at the Securities Association of China on June 17.
He also said brokerages should offer more professional services to support the reform of state-owned enterprises, indebted “zombie” companies, and those burdened with overcapacity.
Analysts expect the deal flow may pick up even more in near future, although it remains to be seen how long this streak will last.
“After all, the capital market is policy-driven,” an investment banker told Caixin.
In the middle of 2016, the CSRC curbed speculative fundraising taking place through the acquisition of shell companies, and rejected backdoor-listing plans involving firms whose controlling shareholders have a recent criminal record.
Faster IPO approval, another route of fund-raising in the capital market, also reduced demand for backdoor listings earlier this year.
Among the latest approved backdoor-listing cases, Shanghai-listed Xinjiang Urban Construction Group Co. Ltd. will be acquired by Zhuolang Textile Machinery Co. Ltd, and pass ownership from the State-Owned Assets Supervision and Administration Commission of Urumqi Municipal Government to Zhuolang CEO Pan Xueping.
May 23 06:20
May 21 17:58
May 21 13:02
May 21 11:15
May 20 21:56
May 20 16:24
May 20 12:59
May 20 03:39
May 19 16:54
May 19 12:48
May 19 06:07
May 18 18:07
- 1Flying to China Still a Challenge as Authorities Extend Restrictions
- 2New Huawei Sanctions by U.S. Are Less Than Meet the Eye, Lawyers Say
- 3China’s New Outbreak Shows Signs the Virus May Be Changing
- 4In Depth: Controlling Covid-19 May Become Ongoing Game of Whack-a-Mole
- 5Exclusive: Luckin Prepares for the Worst in Face of Delisting Risk
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas