Morrison & Foerster Advises State-Owned China CNR in US$1.2 Billion H-Share IPO

Morrison & Foerster is representing China CNR Corporation Limited in relation to its US$1.2 billion H-share IPO, which listed today on the Hong Kong Stock Exchange, making it Hong Kong’s second largest IPO this year.

The state-owned train maker is the world’s largest rolling stock manufacturer, and is also listed on the Shanghai Stock Exchange. The company will become an “A+H” company, after the completion of the H-share IPO. Morrison & Foerster pioneered the first ever A-share and H-share dual rights issue with the firm’s representation of Angang New Steel in 2007 that raised US$2.6 billion. More recently, we advised the underwriters in relation to the US$4 billion A+H placing of China CITIC Bank Corporation Limited.

The deal team was led by Hong Kong partner Charles Chau, with valuable assistance of Hong Kong managing partner Ven Tan on Hong Kong securities law issues, Hong Kong partner Gregory Wang on U.S. securities law issues, Washington D.C. partner Nicholas Spiliotes on US sanction law issues, as well as Berlin partner Christoph Wagner on EU sanction law issues.

“The listing is significant not only for its size, but also for its role in raising investors’ confidence in the IPO market in Hong Kong, in particular, after the recent withdrawal of a planned US$5.3 billion Hong Kong listing of a meat company,” noted Mr. Chau. “The completion of the transaction, once again, demonstrates that our strong capital markets practice in Hong Kong remains at the forefront of the market. At the same time, the effectiveness of our highly integrated teams and our global platform allowed us to draw on the extensive experience of other international offices to resolve critical issues such as foreign sanction law issues that arose during the transaction.”

The China CNR transaction marks the fifth IPO the Morrison & Foerster Hong Kong capital markets team has completed this year. The team kicked off the year with the first three IPOs of 2014 in January, followed by Optics Valley Union’s HK$830 million IPO in March. Our representation of state owned enterprises on capital market deals include Dalian Port, China Resources Power, and China Gold. We have also acted for the underwriters on Sinopharm’s US$1.1 billion Hong Kong IPO and subsequent H-share placings, as well as representing the underwriters on Guodian’s US$300 million IPO in Hong Kong.

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