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Private Placement of Convertible Bonds to Shore up Listed Companies' Developmen


The China Securities Regulatory Commission ("CSRC") recently said that, the private placement of convertible bonds, as a means of payment, by listed companies in mergers and acquisitions (M&A) and reorganization, helps increase the room of negotiations in M&A, provides a more flexible interest solicitation mechanism for deals, and is conducive to effectively relieving cash flow pressure facing listed companies and risks of diluting shares of majority shareholders and diversifying financing approaches for M&A and reorganization. Recently, multiple listed companies have been active in researching ways of applying the private placement of convertible bonds to M&A and reorganization, in consideration of market situations. And some of them have already worked out feasible schemes. The CSRC will, in combination of enterprises' actual situations, actively promote the pilot program on issuing convertible bonds through private placement as the payment instrument in M&A and reorganization, a move to support enterprises of various types, including privately-controlled listed companies, in growing bigger and stronger via M&A and reorganization.

The CSRC's next step is to continue to give full pay to the role of the market-oriented mechanism, constantly research and cater for claims of market players, and create conditions to support enterprises of different types in optimizing the allocation of resources via M&A and reorganization and achieving high quality development.

Gong Chu, Oscar

A lawyer at DeHeng Law Offices (Shenzhen)

Floor 22/11/19/33, Section B, Anlian Plaza,

No. 4018, Jintian Rd., Shenzhen. 518026 P.R.C

Mobile: +86 135 9049 6399, +86 186 8246 3518