Slaughter and May, Hong Kong, is acting for China International Capital Corporation Hong Kong Securities Limited (CICC), the financial adviser to China Jinmao Holdings Group Limited (China Jinmao) in relation to the proposed privatisation of China VAST Industrial Urban Development Company Limited (China VAST) by China Jinmao. The privatisation will be implemented by way of a scheme of arrangement pursuant to the Companies Act of the Cayman Islands (Scheme), a rollover arrangement, an offer for the cancellation of all outstanding share options (Option Offer) and an offer for all outstanding convertible notes (Convertible Note Offer). The announcement of the privatisation proposal was dated 9 June 2022.
The consideration for the Scheme (for approximately 60.20% of the shares of China VAST), the Option Offer and the Convertible Note Offer will be paid in cash. The controlling shareholders will receive a cancellation price of HKD2.13 while non-controlling shareholders will receive a cancellation price of HKD2.40. The total amount of cash required to implement the privatisation proposal is approximately HK$2.57 billion (US$327 million).
Pre-conditions to the proposals include governmental (including anti-trust) approvals and waivers from lenders owed 50% of aggregate borrowings and noteholders.
Conditions of the proposals include shareholders’ approval of the Scheme and the special deal (relating to a rollover arrangement and certain shareholder arrangements pursuant to an irrevocable undertaking under which the controlling shareholders’ 34.18% shareholding would be cancelled under the Scheme, while their 9.90% shareholding would remain outside the Scheme, and the lower cancellation price payable to the controlling shareholders).
This transaction follows the initial investment by China Jinmao into China VAST last year, in which Slaughter and May also advised CICC as financial adviser.
China Jinmao is a large-scale developer and operator of quality real estate projects in the PRC and the platform enterprise of Sinochem Holdings Corporation Ltd. in the development of real estate business. China Jinmao is currently principally engaged in city operations, property development, commercial leasing, retail operations, hotel operations and technology and services. The shares of China Jinmao are listed on the main board of The Stock Exchange of Hong Kong Limited and the implementation of the privatisation proposal constitutes a discloseable transaction of China Jinmao.
The China VAST group is principally engaged in the business of planning, development and operation of large-scale industrial towns, property development and property leasing in the PRC.
CICC is a licensed corporation under the SFO licensed to carry out Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts) and Type 6 (advising on corporate finance) regulated activities.