TITLE:
Value Creation of Strategic Investors under Convertible Bond Investment—A Case Study of Wharf (Holdings) Limited
AUTHORS:
Wei Huang
KEYWORDS:
Strategic Investors, Convertible Bonds, Corporate Governance, Market Value Management
JOURNAL NAME:
Open Journal of Business and Management,
Vol.7 No.1,
January
21,
2019
ABSTRACT: This paper analyzes the case of Wharf’s participation in Greentown China’s
corporate governance under the investment of convertible bonds, and brings the
case of market value growth. It reveals that the strategic investors have
passed the three stages of “value support—value driven—value realization”. The bond issuer realizes value creation
and achieves a win-win situation for both parties. The study found that
strategic investors and bond-issuing companies have complementary resources and
positioning strategies to provide strong value support for cooperation between
the two parties. The key processes driven by value include the investment phase
and the corporate governance phase. In the investment phase, choosing the right
financing method and designing the refined terms provide the basis for strategic
investors to participate in corporate governance. In the corporate governance
stage, strategic investors can restrain
overinvestment by issuing sound financial policies bonds, and participate in
the investment decision-making of bond-issuing enterprises to create
business synergies. The realization of value is reflected in the two aspects of
market value improvement and business improvement.