Gem Refinancing: Put Or Not?

The growth enterprise market opened in October 23, 2009. Now it is almost two years ago. Recently, some GEM companies have issued signals that they hope to refinance.

Wind data show that since the end of February this year, 10 GEM companies including Lai Mei Pharmaceutical (300006), Huayi Brothers (300027) and blue water sources (300070) have launched short and medium term financing bills, and other GEM companies such as Shun Shun Technology (300113), Li Si Chen (300010) and blue cursor (300058) have submitted plans for increasing the purchase of assets. Even in the less than a year after the listing of GEM companies such as Shun Shun Technology and other companies, the acquisition of assets by means of a specific target stock issue was adopted.

In the refinancing scheme, the CSRC's audit is not required in the short term, but the CSRC's audit is required for the issuance and rights issue. However, according to the China Economic Times reporter, many of the companies that want to refinance the GEM board understand that so far, none of the companies that have submitted the private placement plan for asset acquisition has been approved by the China Securities Regulatory Commission.

Many people in the industry say that the reason why China Securities Regulatory Commission has not yet reviewed the refinancing of GEM companies is mainly because the relevant policies and regulations have not been worked out, and the refinancing management methods and relevant operational rules of GEM companies are still under discussion by regulators.

Facing the craving of refinancing of GEM companies, the focus of the GEM listed companies is whether regulators will remain, when and how to put them.

Zhou Ming, deputy general manager of Shenzhen Stock Exchange, recently announced that the demand for refinancing of listed companies on GEM has the characteristics of timeliness, high frequency and small amount of single financing, and the small quick financing system should be launched as soon as possible.

Refinancing of listed companies

Recently, Lai Mei pharmaceutical's motion to issue short-term financing bonds through interbank bond market was voted through the shareholders' meeting. The industry said that Lai Mei pharmaceutical is expected to become the first company to get refinancing in the GEM listed companies.

At the same time, the blue cursor announcement said that the company intends to buy a natural person Wang Jian, Wang Jianwei, Kan Ligang, Zhao Hongwei, Zhou Yunzhou and Wang holding 100% equity interest in Beijing's advertising company by way of a combination of non-public offering and payment of cash to specific objects.

Prior to this, Shun WAN technology (300113) and Li Si Chen submitted to the CSRC early this year a plan to issue additional shares to specific targets.

In January 29, 2011, the board of directors of science and Technology issued "orientation". Additional issue The major asset restructuring plan of the "subscribed assets" and the "cash payment method" involves the underlying assets of the 5 new companies such as Shanghai new hi tech software company, 100% of which are worth 480 million yuan, but up to now, the scheme has not yet been considered by the shareholders' meeting.

Compared with wind technology, Li Si Chen's refinancing is a step further.

In March 3, 2011, Li Si Chen's board threw out a private placement plan. The company intends to issue additional shares to a specific target to buy a 100% stake in Shanghai Internet network technology company, which is 295 million yuan. The plan was submitted to the shareholders' general meeting in March 21st for deliberation and approval.

But Li Si Chen's plan has not passed the approval of the SFC. In July 7, 2011, Li Si Chen announced that, since the audit date of the application document was December 31, 2010, the financial information had already passed the validity period, and the company needed to submit the new financial information to the SFC again. Li Si Chen Dong Hua Ting, an interview with our reporter, said that at present, Li Si Chen has not yet supplemented the relevant materials to the SFC, and it will have to wait for some time.

When the road of low cost refinancing is temporarily blocked, Lai Mei pharmaceutical, Huayi Brothers and Jifeng agricultural machinery (300022) have chosen to issue short-term financing coupons. Wind data show that 10 GEM companies have launched short-term or medium-term financing coupons, raising a total of 5 billion 840 million yuan, mainly for developing their own businesses and replenishing the company's working capital and repayment of bank loans.

A gem board manager said that as of now, the securities and Futures Commission has not yet issued regulations on the refinancing of the gem. If the GEM companies apply for the issuance and issue of shares, they will have to go through the approval of the SFC. The estimated time will be longer.

When will GEM companies refinance? This is a problem we are all concerned about. A gem board manager said that although some GEM companies were thirsty for money, regulators had been very cautious.

Up to now, none of the GEM companies that announced the refinancing plan has been approved.

When will the refinancing laws and policies come out?

As early as the two sessions in 2010, Ouyang Zehua, deputy director of the National People's Congress and deputy director of the China Securities Regulatory Commission's listed company supervision department, said at a press conference that the relevant measures for gem refinancing were being worked out, and the listing department had set up five listed companies to supervise the GEM companies.

In January 8, 2011, Shang Fulin, chairman of the China Securities Regulatory Commission, also said that we should fully learn from China's main board market and international experience, study and formulate refinancing measures for listed companies on GEM, set up a convenient and efficient financing mechanism to adapt to the characteristics of gem, actively explore the delisting system of GEM companies, and give full play to the market's survival of the fittest.

But up to now, China Securities Regulatory Commission has not yet formulated refinancing regulations for GEM companies.

Many executives and insiders interviewed by our reporter said that the issuance conditions of motherboard refinancing are not suitable for gem.

Xiao Jinquan, senior partner of Dacheng Law Firm, said in an interview with the newspaper that the refinancing of the listed companies on GEM can not be carried out according to the refinancing regulations and conditions of the motherboard. It should refer to the experience of the international successful gem and formulate the management and operation rules according to the actual situation of the listed companies in the domestic gem.

In May 2006, the China Securities Regulatory Commission promulgated and implemented the measures for the management of securities issuance of listed companies, and made provisions on the Refinancing Behavior of listed companies from the conditions of statutory issuance, the use of the previous raised funds, the use of this raised fund, the purchase of major assets, the related party transactions, the competition in the same industry, and the environmental protection.

It is understood that the China Securities Regulatory Commission has held several meetings to discuss ways to refinance listed companies on GEM. It is reported that the main board refinancing procedures are more complex, longer time and higher costs, and are not suitable for GEM companies. The supervision department intends to adopt a small, fast and multiple financing mechanism for GEM companies with financing amount of less than billion yuan.

There is a gem board executive told reporters that the regulatory authorities support GEM companies through refinancing bigger and stronger, but compared with the motherboard, the gem refinancing approach has changed greatly, it is difficult to introduce in the short term.

A sponsor of the securities company said that the gem refinancing method was to trigger the trigger of the refinancing of gem. On the one hand, most of the GEM companies had just been listed, and the initial fund-raising funds had not yet been used up, and there were still a lot of over raised funds. On the other hand, GEM companies had a high price earnings ratio, but their performance was not outstanding, and more importantly, the gem. Delisting The system has not yet been released, and the market is worried that GEM companies with smaller share capital and smaller assets will become shell resources because of refinancing.