Injection).
In addition, although the parent company injected capital into the subsidiary, the parent company did not give the assets to the subsidiary free of charge, and the subsidiary still had to pay cash, issue new shares and issue convertible bonds. As the price of the acquired assets; Even if cash is injected, subsidiaries must pay the price, such as issuing new shares, convertible bonds or signing a loan agreement with the parent company.
Capital injection can also be regarded as a subsidiary's purchase of assets from the parent company to support or expand its business scale; By injecting capital into the subsidiary, the parent company also listed some assets under the name of the subsidiary.
Because the cost paid by subsidiaries is generally lower than the cost of acquiring the same type of assets in the market, capital injection is mostly good news. However, if the major shareholder abuses the capital injection channel, it will prompt the company to buy the inferior assets held by the major shareholder at a high price, or it will be unfavorable to the minor shareholder.