Slaughter and May is advising Xiamen Port Holding Group Co., Ltd. (Xiamen Port Holding) on the proposed privatisation and delisting from the Hong Kong Stock Exchange, through its wholly-owned subsidiary, Xiamen Port Investment Operation Co., Ltd. (Xiamen Port Investment) as the offeror, of Xiamen International Port Co., Ltd (Xiamen International Port), a company incorporated in the PRC and listed on the Hong Kong Stock Exchange. The privatisation will be implemented by way of a merger by absorption. China International Capital Corporation Hong Kong Securities Limited is the financial adviser to the offeror. The privatisation proposal was announced on 2 June 2022.
The aggregate amount of cancellation price required to cancel the H Shares held by H Shareholders is approximately HK$2.22 billion (approximately US$283 million). Shia Ning Shipping Company Limited (Shia Ning Shipping), Xiamen Port Holding’s indirectly wholly-owned subsidiary which directly holds 141,264,000 H Shares (approximately 5.18% of Xiamen International Port’s issued share capital) has agreed for the time of payment to be postponed to a later date to be agreed. The domestic shares directly held by Xiamen Port Holding will be cancelled in exchange for registered capital of Xiamen Port Investment. The aggregate amount of cancellation price required to cancel the Domestic Shares held by the Domestic Shareholders (other than Xiamen Port Holding) is approximately RMB35 million (approximately US$5.28 million). The total cash cancellation consideration is HK$2.26 billion (approximately US$288 million).
The privatisation will be subject to pre-conditions relating to regulatory approvals and to conditions which include shareholder approvals.
Xiamen Port Holding is one of China’s leading port logistics operators primarily engaged in loading, unloading and transportation. It is a state-owned enterprise wholly-owned by Fujian Province Port Group Limited Liability Company, which is in turn controlled by the State-owned Assets Supervision and Administration Commission of the People’s Government of Fujian Province.
Xiamen International Port is primarily engaged through the relevant terminals in Dongdu port area and Haicang port area of Xiamen, Qingzhou operating area in Fuzhou and Quanzhou port, in (i) container, bulk and general cargo loading and unloading and storage businesses; (ii) comprehensive port logistic services, including port-related logistics, shipping agency, tugboat berthing and unberthing services, tallying; and (iii) trading of merchandise.
The offeror, Xiamen Port Investment, is newly incorporated and wholly-owned by Xiamen Port Holding for the purpose of the merger. Its scope of business includes management as corporate headquarter; information consulting services (except with respect to the category of information for which approval is required); loading, unloading and transportation; and port operations.
Slaughter and May is also advising the offeror on its certain funds financing for the cash required for the privatisation proposal.