Sino-Ocean Land’s US$900 million convertible securities offering was the first corporate-hybrid offering issued by a Hong Kong-listed company, the largest international equity-linked issuance for a mainland Chinese property developer and the first of its kind in Asia ex-Japan. It utilised a complex capital instrument that was convertible in nature and though debt-like, actually afforded equity treatment. This structure had never been used before in Asia, but under the market conditions, it was a good fit for Sino-Ocean Land Holdings. The perpetual subordinated convertible securities met the issuer’s needs and appetite of its investors since it wasn’t going to drive up the debt-to-equity ratio. The issuance was also in compliance with existing agreements.
Negotiating terms and conditions proved complicated as there wasn’t a benchmark for this new type of convertible bond offering. Credit events had to be formed and a unique lever in the structure was created so that instead of accelerating the perpetual securities and opening the door for investors to demand the right to be repaid, the lever was that the perpetual securities couldn’t pay anyone back. Ultimately, the offering was completed successfully and blazed a trail for other similar companies, such as Franshion Properties, to raise funds offshore by adopting the same perpetual securities structure.
AIA Group’s US$20.5 billion IPO stamped its mark last October as the largest insurance IPO ever, the largest ever single-market listing in Hong Kong and the third largest IPO worldwide.
Earlier in 2010, British insurer Prudential announced it would buy AIA for US$35.5 billion, but talks collapsed and the sale fell through. This aborted transaction elicited nervousness from the Hong Kong Stock Exchange (HKSE) about the listing and the professional parties involved in the deal had to work with the Exchange to allay anxieties. Timing of the IPO was critical as preparations for the listing were based on results of its last fiscal half-year and so it had to be achieved before these results turned stale. Another twist was that the launch date coincided with the HKSE’s Listing Committee’s new rulings on pre-IPO investment agreements signed close to the date of the listing application, and to the HKSE-led review of strict and problematic placing guidelines limiting the ability of underwriters to place connected clients.
Despite these challenges, the listing was extremely successful, pricing at the top of its range and catapulting the company’s stock to a double-digit gain when it began trading again. The transaction also represented parent company AIG’s largest divestment as it aimed to repay the US government and taxpayers for the emergency funding it received after the 2008 financial crisis.
Project Finance
Winner
Gansu Guazhou Wind Power Project
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Allen & Overy (International Finance Corporation)
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Appleby (International Finance Corporation)
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Jun He Law Offices (International Finance Corporation)
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Zhong Lun Law Firm (Project company)
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The International Finance Corporation’s (IFC’s) project financing for the development and construction of a wind farm in Gansu province was the first wind power project financed with offshore debt in China and its financing was the first foreign loan to be registered at the local State Administration of Foreign Exchange. The project is the 201 MW Gansu Guazhou Ganhekou No.8 Wind Farm and its sponsor is the Hong Kong Stock Exchange-listed China Wind Power Group (CWPG). The IFC made a US$10 milllion equity investment into CWPG and a loan of US$140 million was extended to the project company under the IFC’s A/B loan structure.
The deal required a thorough analysis of the PRC regulatory framework for PRC renewable energy and risk allocation under standard form project documentation, as well as work within a relatively complex financing structure to accommodate the PRC foreign exchange regime. Once the project is operational, the wind farm will reduce over 420,000 tonnes of carbon dioxide emissions per year and paves the way for the other 18 other comparable wind power facilities that are under development in Gansu province.
FINALISTS
Baicheng Taobei-Baoshan Wind Farm Phase 1 Project
Dow Chemical Shaanxi Coal-to-Chemicals Project
Rudong LNG Terminal
China Development Bank – Venezuela Development Projects Financing
Energy & Natural Resources
Winner
Sinopec-Sinopec Sonangol
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Allen & Overy (Sinopec)
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Herbert Smith (Sinopec)
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Skadden Arps Slate Meagher & Flom (Sinopec)
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In a complicated internal reorganisation, state-owned oil and chemical giant Sinopec Corporation made its first acquisition of overseas upstream assets through its wholly-owned subsidiary, Sinopec Corporation Hong Kong (Sinopec HK). The US$2.5 billion acquisition of a 55% stake in Sonangol Sinopec International (SSI), an oil and gas offshore explorer and producer in Angola, helps Sinopec expand its upstream assets and the scope of its business. Sinopec HK had entered into an agreement with Sinopec Overseas Oil & Gas (SOOGL), a wholly-owned subsidiary of Sinopec International Petroleum Exploration and Production Corporation (SIPC), to acquire the equity interest. SOOGL also novated all of its rights and obligations under a US$779 million loan facility between SOOGL as lender and SSI as borrower to the acquisition vehicle.
SIPC originally owned SSI and Block 18, the offshore Angolan oil field, and the assets were then transferred to Sinopec HK, a publicly-listed company. This structure made Sinopec HK’s purchase a lot more efficient and smooth because moving the assets from a privately, completely controlled company to a public affiliate avoided numerous obstacles typically accompanying a public company purchase such as requiring shareholder approval. Also, 100%-owned Chinese companies are entitled to government incentives, so SIPC was able to take advantage of these with its initial acquisition of SSI/Block 18. Transferring the assets to the public Sinopec HK proved to be challenging for the legal teams with various considerations from proper disclosures and managing shareholder votes to securing independent valuations and ensuring accurate accounting documents. In the end, the turnout of the independent shareholder vote was very successful and the acquisition was approved.
FINALISTS
Minmetals-Equinox
China State Grid-Brazilian Assets
CNOOC-Tullow
Real Estate & Construction
Winner
Shanghai Disneyland
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Baker & McKenzie (Walt Disney Company)
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Paul Weiss Rifkind Wharton & Garrison (Shanghai government and Shanghai Shendi)
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Zhong Lun Law Firm (Shanghai Shendi)
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Bringing a Disneyland theme park and resort to Mainland China has been an epic project that stretches back to over a decade. Walt Disney Company had signed a joint venture agreement with Shanghai Shendi to build a Shanghai Disney theme park. Besides the soon-to-be theme park’s heavy-hitting brand status and being a future iconic landmark, the structuring and execution of the project’s construction has required dedication and creativity from the legal teams. The new Shanghai Disney theme park and resort will encompass both Chinese and Shanghai characteristics and represents one of the largest foreign investment projects into the PRC with its value topping US$3.5 billion.
Unlike other Disney international parks, the Shanghai project will utilise a unique “Shanghai model” for investing in, developing and operating the resort area. It is split into three different joint ventures (JVs), one for the associated facilities, one for the management company and one for the theme park. Lawyers had to balance out and weigh the interactions, conflicts of interest and individual business scopes of the majority shareholders of the various JVs when drafting up agreements. Structuring also involved dealing with complex infrastructure and real estate issues, licensing, acquiring numerous government approvals and managing political dynamics. “There are still more bumps to come, and the proof will be in the pudding, but I am very proud to be involved in this project,” said one lawyer.
FINALISTS
Changsha Meixi-Lake Project
Chevalier-Huaqiao Hotel
LaSalle-Socam Chengdu JV
China Outbound
Winner
State Grid Corporation of China – Brazilian Assets
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Dias Carneiro Advogados (Sellers)
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Milbank Tweed Hadley & McCloy (State Grid)
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Machado Meyer Sendacz e Opice Advogados (State Grid)
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Pinheiro Neto Advogados (State Grid)
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Uria Menendez (Sellers)
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State Grid Corporation of China’s (State Grid’s) successful bid and acquisition of seven power transmission projects in Brazil marked the largest completed Chinese investment into the country to date. It was also the largest Chinese acquisition of power transmission assets outside China and the first time a Chinese company had acquired complete control of a foreign electricity grid asset. The investment was strategic and politically-driven, and focused on receiving high returns rather than being a critical investment for resources. “This deal is a road map of where the Chinese are going,” said one lawyer.
The hurdles the Chinese buyer faced were numerous, as the Spanish sellers were initially very doubtful of the Chinese as bona fide and credible buyers - State Grid had no previous experience or connections in Brazil. Despite competing against domestic Brazilian companies that had homegrown advantages, State Grid’s sophisticated and experienced legal and deal teams managed to structure a bid so attractive, the Spanish sellers couldn’t refuse. One difficulty during negotiations was the seller wanted a large non-refundable cash deposit, but PRC regulations were restrictive of allowing State Grid to agree to the request. Another issue revolved around control of the assets, and a strategy had to be crafted to deal with the rights of first offer with the sellers. Negotiations around this were challenging and had to be extended. The control of the assets between the deal signing and closing was another bump in the road as both parties had to find a middle ground to their opposing views. Financing was expected to be a challenge, but when the Brazilian National Bank stepped in and offered funds to State Grid, it spurred on Brazil’ regulatory approvals. In the end, all the required approvals came through from both countries and this significant deal was completed within the timeframe of a year.
FINALISTS
CNOOC-Tullow
Wanhua-BorsodChem
Sinopec-Sinopec Sonangol
China Development Bank – Venezuela Development Projects Financing
In-house Teams of the Year
Chinese Company
Winner
China Petroleum & Chemical
Corporation (Sinopec)
The in-house legal team at China Petroleum & Chemical Corporation (Sinopec) continued its busy run this year, leading in a number of large-scale projects and even conducting an internal structural reorganisation via an asset acquisition in Africa. The latter transaction was the energy deal of the year for 2011, Sinopec Corporation Hong Kong’s multi-billion dollar purchase of a stake in Sonangol Sinopec International in Angola. A highlight for the team was the birth of the Shandong LNG Project, which was kick-started in July 2010 after State approval of the three million tpa-capacity wharf, terminal and auxiliary transportation pipeline. Construction began in September 2010 and the project is expected to be put into operation in 2013. This is Sinopec’s third year in a row winning the China Company In-House Team of the Year award.
Winner
State Grid Corporation of China
With a legal in-house team that was described by a private practice lawyer as being “extremely sophisticated and organised”, State Grid Corporation of China, also wins a top spot with the China Company In-House Team of the Year award. In addition to spearheading the outbound deal of the year, its landmark acquisition of Brazil-based power assets, the legal team has enjoyed a stellar year of activity. It recently raised over US$1 billion through a private placement of an issue of three-year medium term notes. In May, it announced construction of over 337,000 kilometres of power transmission lines in China, and in August, State Grid sold the entire share capital of its subsidiary, a Hefei-based measuring equipment manufacturer and seller, to Nari Technology Development.
FINALISTS
China Minmetals
CNOOC
Guangzhou Auto
Sinochem
Sino-Ocean Land Holdings
SouFun Holdings
Wanhua Industrial Group
International Company
Winner
Foxconn Technology
The Global legal division of Foxconn Technology had a dynamic year that tested its mettle, but the dedication and continued excellence of its advisors achieved impressive results. The team of 600 worldwide handled over 46,000 cases, many of them cross-jurisdictional and complex, and filed over 15,000 patent applications. The team led on the legal affairs of two significant transactions, one in Chengdu and one in Chengzhou. The latter one saw the in-house team complete the transaction in less than one month, and in this timeframe, the team unraveled numerous legal issues that ensured a smooth transition from investment incentives, factory construction, recruitment, supply chains, logistics, procurement, customs and taxation, to production. Last year, the legal division collaborated with Foxconn’s IT department and created a mechanism that assists in intellectual property protection. It also worked to implement a programme for employees that promotes mental well-being and enriches their welfare.
FINALISTS
Diageo
Hanwha
Motorola
Telstra
Tullow
Chinese Financial Institution
Winner
Agricultural Bank of China
Apart from directing external counsel in the world’s largest ever initial public offering, at US$22.1 billion, the in-house legal team at the Agricultural Bank of China (ABC) has worked alongside the bank’s corporate finance department and been active on a number of significant transactions. For example, in August 2011, the lawyers were busy as ABC led a Rmb1 billion Renminbi bond underwriter for Citic Pacific’s five-year maturity with a coupon rate of 2.7%. In the same month, they additionally featured in the dim sum bond offering of China Eastern Airlines. Recently, ABC was appointed as an underwriter in XCMG Construction Machinery’s planned Hong Kong IPO and in Citic Group’s expected US$10 billion IPO that is being prepared for next year.
FINALISTS
Bank of China
Bank of Communications
China Development Bank
CICC
Citic Securities
ICBC
International Investment Bank
Winner
Deutsche Bank
Acting on an envious amount of leading mandates around China and Hong Kong, the in-house legal team at Deutsche Bank has been very busy. Not only did it work on 2010’s two biggest initial public offerings (IPOs), AIA’s and Agricultural Bank of China’s, it was also instrumental in SouFun Holdings’ offering. These deals were just a fraction of the portfolio of work that kept the seven-strong China/Hong Kong in-house team on its toes. For example, last year, the bank increased its equity stake in Hua Xia Bank and it recently acted in China Eastern Airlines dim sum bond offering, China Shanshui Cement Group’s debt offering, Shanghai Pharma’s US$2 billion IPO, Renren’s IPO, and China Rongsheng’s IPO, to name a few. The list is long, with CLP noting no fewer than 30 deals completed since May 2010, and the sheer volume showcases the hard work and dedication of the bank’s legal division.
FINALISTS
Credit Suisse
Goldman Sachs
JP Morgan
Morgan Stanley
UBS
Winner
Wang Liming
As one of China’s leading authorities on the country’s civil law and a scholar dedicated to accelerating China’s legal regime, it is China Law & Practice’s honour to award Wang Liming with the Outstanding Achievement award for 2011.
Originally from Xiantao in Hubei province, Professor Wang is the first academic to earn a doctorate in Chinese civil law after the establishment of the People’s Republic of China. He is currently a law professor at the Renmin University School of Law and the Vice President and Deputy Secretary of the Party for Renmin University of China.
No stranger to accolades, Professor Wang has a long list of achievements over the course of his career thus far. In 1995, he was selected as one of the “Ten Outstanding Young Jurists” by the China Law Society, and two years later in 1997, he was named as one of the “Ten Figures in Jurisprudence”. Professor Wang has gained prominence in the international community as well, attending Harvard Law School from 1999 to 2000 and Yale Law School in 2004 as a visiting scholar. His appointments include being the Vice Chairman of the China Law Society, the Chairman of the China Law Society’s Civil Law Research Association, a Deputy to the 11th National People’s Congress, a Council member on the Social Sciences Commission for the Ministry of Education, and a Vice Chairman on the China International Economic and Trade Arbitration Commission (Cietac), among others.
Over the years, Professor Wang has contributed significantly to the evolution of a number of important legislation. These laws are the foundations for a lot of the transactional work or cases private practice lawyers work on. For example, Professor Wang has participated in the drafting and amending of the PRC Economic Contract Law, PRC Contract Law, PRC Patent Law, Product Quality Law and the PRC Tort Liability Law. He was a chief drafter for the PRC Property Law (Draft), playing a key role in the property law’s formation. Professor Wang continues to lecture and research on his specialty areas of law.
There is no doubt that for many years to come, Professor Wang’s efforts and expertise will serve to advance the development of China’s legal structure. It is with great honour and pleasure that China Law & Practice recognises Professor Wang’s contribution and commitment to Chinese law with the Outstanding Achievement award. We celebrate that even just one great mind, together with passion, support and community, can achieve marvelous results with the power to influence and change the lives of many.
Teams of the Year
International M&A
Winner
Baker & McKenzie
Finalists
Freshfields Bruckhaus Deringer
Linklaters
O’Melveny & Myers
Paul Weiss Rifkind Wharton & Garrison
Skadden Arps Slate Meagher & Flom
China M&A
WINNER
Haiwen & Partners
FINALISTS
Fangda Partners
Grandall Law Firm
Jun He Law Offices
King & Wood
Zhong Lun Law Firm
International Private Equity
Winner
Paul Weiss Rifkind Wharton & Garrison
Finalists
Clifford Chance
Simpson Thacher & Bartlett
Skadden Arps Slate Meagher & Flom
Weil Gotshal & Manges
China Private Equity
WINNER
Fangda Partners
FINALISTS
Allbright Law Offices
Boss & Young
Haiwen & Partner
Han Kun Law Offices
Llinks Law Offices
International Banking & Finance
Winner
Allen & Overy
Finalists
Baker & McKenzie
Clifford Chance
Hogan Lovells
Linklaters
China Banking & Finance
WINNER
Global Law Office
FINALISTS
Fangda Partners
Grandall Law firm
Jun He Law Offices
King & Wood
Llinks Law Offices
International Capital Markets
Winner
Davis Polk & Wardwell
Finalists
Freshfields Bruckhaus Deringer
Latham & Watkins
Linklaters
Paul Hastings
Skadden Arps Slate Meagher & Flom
China Capital Markets
WINNER
Commerce & Finance Law Offices
FINALISTS
Fangda Partners
Haiwen & Partners
Jingtian & Gongcheng
Jun He Law Offices
King & Wood
International Projects, Energy & Infrastructure
Winner
Shearman & Sterling
Finalists
Allen & Overy
Herbert Smith
Latham & Watkins
Milbank Tweed Hadley & McCloy
Vinson & Elkins
China Projects, Energy & Infrastructure
WINNER
Jun He Law Offices
FINALISTS
Broad & Bright
Guantao Law Firm
King & Wood
V&T Law Firm
Zhong Lun Law Firm
International Restructuring
Winner
Allen & Overy
Finalists
Baker & McKenzie
Clifford Chance
Hogan Lovells
O’Melveny & Myers
China Restructuring
WINNER
Guantao Law Firm
FINALISTS
Concord & Partners
Global Law Office
Zhong Lun Law Firm
Zhong Yin Law Firm
Regional Firms of the Year
Beijing
Winner
King & Wood
Commerce & Finance Law Offices
Fangda Partners
Haiwen & Partners
Jingtian & Gongcheng
Jun He Law Offices
Zhong Lun Law Firm
Hangzhou
Winner
Zhejiang T&C Law Firm
Capital Equity Legal Group
High Mark Law Firm
Shanghai
Winner
Jun He Law Offices
Allbright Law Offices
Boss & Young
Chen & Co
Fangda Partners
Grandall Law Firm
King & Wood
Llinks Law Firm
Chongqing
Winner
Solton & Partners
Exceedon & Partners
Zhonghao Law Firm
Nanjing
Winner
JC Master Law Offices
Jiangsu Co-Far Law Firm
Jiangsu Way-To-Justice Law Firm
Jin Ding Partners
Shenzhen
Winner
Zhongyin Law Firm
Jing Tian law Firm
Jingtian & Gongcheng
V&T Law Firm
Guangzhou
Winner
Guangdong Guangda Law Firm
Alpha & Leader Law Firm
C&I Partners
Wang Jing & Co
Qingdao
Winner
Shandong Deheng Law Firm
Shandong Qindao Law Firm
Shandong Ya & Tai Law Firm
Wincon Law Firm
Tianjin
Winner
Winners Law Firm
Join & High Law Office
Mingzhou Law Firm
Tianjin Jinjianbaoqi Law Firm
International Dispute Resolution
Winner
Herbert Smith
Allen & Overy
Baker & McKenzie
Clifford Chance
Linklaters
Orrick Herrington & Sutcliffe
China Dispute Resolution
Winner
King & Wood
Commerce & Finance Law Offices
Fangda Partners
Jingtian & Gongcheng
Jun He Law Offices
Zhong Lun Law Firm
International Intellectual Property
Winner
Rouse
Baker & McKenzie
Finnegan Henderson Farabow Garret & Dunner
Hogan Lovells
Jones Day
China Intellectual Property
WINNER
CCPIT
FINALISTS
Hylands Law Firm
King & Wood
Liu Shen & Associates
Zhongzi Law Office
International Tax
Winner
DLA Piper
Baker & McKenzie
Jones Day
Mayer Brown JSM
O’Melveny & Myers
China Tax
Winner
Llinks Law Offices
Hwuason Law Firm
King & Wood
Richard Wang & Co
Zhong Lun Law Firm
International Labour & Employment
Winner
Baker & McKenzie
Finalists
DLA Piper
Mayer Brown JSM
Paul Hastings
Simmons & Simmons
China Labour & Employment
Winner
TransAsia Lawyers
Haoliwen PRC Attorneys
Jun He Law Offices
R&P China Lawyers
Runming Law Office
Shanghai HR&L Law Firm
International Real Estate & Construction
Winner
Paul Hastings
Baker & McKenzie
DLA Piper
Mayer Brown JSM
Simmons & Simmons
China Real Estate & Construction
Winner
Zhong Lun Law Firm
Dacheng Law Offices
Guantao Law Firm
Hengtai Law Offices
V&T Law Firm
ZhongLun W&D Law Firm
International Competition
Winner
Mayer Brown JSM
Clifford Chance
Freshfields Bruckhaus Deringer
Linklaters
Norton Rose
China Competition
WINNER
Broad & Bright
FINALISTS
Dacheng Law Firm
Jun He Law Offices
King & Wood
MWE Law Offices
International TMT
Winner
Herbert Smith
Baker & McKenzie
Freshfields Bruckhaus Deringer
Hogan Lovells
Paul Weiss Rifkind Wharton & Garrison
China TMT
Winner
Dacheng Law Firm
Commerce & Finance Law Offices
Fangda Partners
Tian Yuan Law Firm
Watson & Band
International Shipping & Maritime
Winner
Ince & Co
Clyde & Co
Holman Fenwick Willan
Mayer Brown JSM
Norton Rose
China Shipping & Maritime
Winner
Wang Jing & Co
Fangben Law Office
Global Law Office
Hai Tong & Partners
Yao Liang & Partners
Up-and-Coming
Winner
Jade & Fountain PRC Lawyers
Broad & Bright
FenXun Partners
Han Kun Law Firm
Most Innovative
Winner
Han Kun Law Offices
Broad & Bright
Jade & Fountain PRC Lawyers
Jincheng Tongda & Neal Law Firm
Taiwan
WINNER
Lee & Li
FINALISTS
Chen & Lin
LCS & Partners
Tsar & Tsai
Japan
Winner
Mori Hamada & Matsumoto
Anderson Mori & Tomotsune
Nagashima Ohno & Tsunematsu
Nishimura & Asahi
Korea
Winner
Kim & Chang
Bae Kim & Lee
Lee & Ko
Shin & Kim
Offshore
Winner
Maples and Calder
Appleby
Conyers Dill & Pearman
Walkers
International Firm of the Year
Winner
Baker & McKenzie
Allen & Overy
Freshfields Bruckhaus Deringer
Linklaters
Paul Weiss Rifkind Wharton & Garrison
Skadden Arps Slate Meagher & Flom
China Firm of the Year
Winner
Fangda Partners
Commerce & Finance
Haiwen & Partners
Jingtian & Gongcheng
Jun He Law Offices
King & Wood
*** To view photos of the awards night, including all the winners, please click: China Law & Practice Awards 2011 photos. If you would like higher resolution photos, please contact us at: candice.mak@euromoneyasia.com . ***
