New M&A financing rules amid the financial crisis
February 09, 2009 | BY
clpstaff &clp articlesGavin Wang and Wang YaxunRun Ming Law [email protected], [email protected] economic downturn has hit China, and distressed assets or troubled…
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Gavin Wang and Wang Yaxun
Run Ming Law Office
The economic downturn has hit China, and distressed assets or troubled companies holding undervalued pieces are eagerly waiting for the right buyer, which could bring many opportunities in the Chinese M&A market. The China Banking Regulatory Commission (CBRC) released the Guidelines on Risk Management of Acquisition Loans of Commercial Banks (Guidelines) on December 9 2008, overturning a long-standing restriction on the extending of bank loans for M&A.
SCOPE OF PERMITTED M&A LOANS
The Guidelines apply to the acquisition of existing equity interest, the subscription of increased capital