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New refinancing policy related content released

On the evening of November 11, relevant persons in charge of the Shanghai Stock Exchange and the Shenzhen Stock Exchange answered reporters' questions about optimizing the refinancing supervision arrangements. Judging from the content of the questions and answers, the Shanghai and Shenzhen Stock Exchanges have introduced a total of 8 specific measures to optimize refinancing supervision, including strictly restricting the refinancing of listed companies that have broken their issue prices or net assets, and strictly controlling the financing intervals of companies with continuous losses.

The series of measures introduced by the Shanghai and Shenzhen Stock Exchanges to optimize refinancing regulatory requirements are a major reform and improvement to the current refinancing system for listed companies. This series of new refinancing policies will help listed companies' refinancing behavior return to rationality, and make listed companies' refinancing behavior no longer "if you don't circle, it's a waste; if you circle, it's a waste, and who wouldn't circle if it's a waste".

The highlights of the new refinancing policy are very obvious. For example, the money-making behavior of listed companies will be suppressed to a great extent. On the one hand, listed companies cannot refinance whenever they want. The new policy strictly restricts the refinancing of listed companies that have broken the issue price or the net value, and requires that there shall be no break-issue or net value situation on any of the 20 trading days before the meeting of the board of directors of the listed company's refinancing plan and the 20 trading days before the launch of the issuance. For the refinancing of loss-making enterprises, the financing interval period is strictly controlled, and it is stipulated that the date of the board of directors' resolution of this refinancing plan shall not be less than 18 months from the date of the previous fundraising. At the same time, frequent over-financing and "cross-border expansion" are also included in the scope of strict supervision.

On the other hand, the refinancing of listed companies that are not short of money will be strictly regulated. It is stipulated that the idleness of large amounts of previously raised funds will be a strictly regulated situation, and it is required that when the board of directors of listed companies convenes to discuss the refinancing plan, the previously raised funds should be basically used up. At the same time, it is stipulated that if a listed company has a high proportion of financial investment, the amount of funds raised in this refinancing must be reduced accordingly. In this way, those companies that have invested a large amount of funds in financial management will have to "correspondingly reduce the amount of funds raised in this refinancing" when refinancing.

In addition, the use of funds raised by listed companies will also be strictly reviewed. The new refinancing policy strictly checks whether the funds raised are in line with the requirements of national/industrial policies and whether they are invested in the main business. It requires listed companies to raise funds through refinancing projects that are closely related to the existing main business and have obvious synergy with the original business after implementation. Prevent blind cross-border investment and diversified investment. For investment projects that do not meet the requirements, listed companies are required to reduce them during the review.

In addition, the new refinancing policy has another bright spot, which is the strict control of the refinancing scale and the strict control of the rationality and necessity of the refinancing funds. For listed companies that cannot fully explain the rationality of the financing scale, they are required to reduce the amount or terminate the review. For companies that need large-scale refinancing, they need to communicate with the exchange in advance to avoid unnecessary impact of large-scale refinancing on the secondary market. The "large-scale refinancing pre-communication mechanism" here is an innovative move of the new refinancing policy to stabilize market expectations.

It is precisely because of the existence of the above-mentioned highlights that the implementation of the new refinancing policy has a positive significance for regulating the refinancing behavior of listed companies and returning listed companies' refinancing to rationality. However, judging from the optimized refinancing supervision arrangements launched by the Shanghai and Shenzhen Stock Exchanges, there is still room for further improvement in the new refinancing policy. By further improving the new refinancing policy, the refinancing behavior of listed companies will be further rationalized and standardized.

First, the responsibility system is implemented for the projects that the refinancing funds are invested in. In fact, in this new refinancing policy, it has been mentioned that the use of pre-raised funds should be strictly controlled, and listed companies are required to fully disclose the reasons and rationality for the postponement, change, and cancellation of pre-raised projects, and the reasons why the benefits of pre-raised projects are lower than expected. In fact, on this basis, it is entirely possible to go a step further, that is, to implement a responsibility system for the projects that are invested in by the funds raised. For the projects that cannot be completed on schedule or the benefits are lower than expected, the relevant responsible persons must be held accountable, including the directors, supervisors and senior managers who voted in favor of the relevant projects when they were established. This is an important guarantee for the quality of the projects that are invested in by the funds raised.

Secondly, the new policy can link the refinancing scale with the dividend amount of listed companies when controlling the refinancing scale. It stipulates that the refinancing amount of listed companies shall not exceed twice the cash dividend amount given to public investors by the listed companies since the previous fundraising, or shall not exceed the dividend amount of the listed companies.

Third, for loss-making companies that are refinancing, in addition to being subject to the 18-month financing interval restriction, it is also stipulated that if the company fails to turn losses into profits or its performance fails to meet the predetermined target, its private placement shares shall not be listed for circulation. In this way, institutional investors will be much more rational in participating in the private placement of loss-making companies.