International law firm Freshfields Bruckhaus Deringer has advised Japan’s SBI Holdings, Inc. on its US$167 million global offering of Hong Kong Depository Receipts (HDRs) and its secondary listing on the Hong Kong Stock Exchange (SEHK).
SBI is a financial services firm listed on the Tokyo and Osaka Stock Exchanges and primarily operates in five core business segments including asset management, brokerage and investment banking, financial services, housing and real estate and other businesses.
SBI’s listing achieved a significant milestone in Hong Kong’s goal to attract foreign incorporated companies to list on its Exchange. SBI is the first Japanese incorporated company to list on the Hong Kong Stock Exchange. Whilst a secondary listing, SBI raised fresh capital by being the first company ever to have offered Hong Kong Depository Receipts in Hong Kong.
The listing achieved several regulatory breakthroughs which should pave the way for more listings of Japanese companies, whether listed or not, on the Hong Kong Stock Exchange, including reconciling the differences between the comparable laws and regulations in Hong Kong and Japan and permitting Japanese companies to present financial information in Japanese GAAP, until IFRS becomes the standard in Japan in 2013.
SBI’s initial HDRs began trading on 14 April 2011 and were priced at HK$80.23 each, raising approximately HK$1,297 million (US$167 million) in capital. SBI will use the listing proceeds to develop new and existing businesses in rapidly growing economies such as China, Brazil and other Asian and Eastern European countries as well as to fund its existing brokerage and investment banking business and for general working capital.
‘Congratulations to SBI on achieving the accolade of being the first Japanese company to list on the Hong Kong Stock Exchange and the first company to issue HDRs in Hong Kong,’ commented Teresa Ko, Freshfields’ China managing partner.
‘We feel very honoured to have helped SBI to complete its fundraising and listing against uncertainty and market volatility following the recent earthquake and tsunami in Japan. Under the sponsorship of Daiwa Capital Markets, SBI has blazed a trail which we hope will inspire and encourage other companies to list in Hong Kong. We wish Mr. Kitao, SBI’s CEO, and his management team enduring success and congratulations to all other advisers involved.’
‘There are very few companies with dual listings in Japan as many international issuers have left the market,” explained Junzaburo Kiuchi, partner in Freshfields’ Tokyo office. “These deals are tough because two very different sets of rules have to be made to work together but it was a pleasure to help SBI on this ground breaking deal.’
The Freshfields international capital markets team advised on Hong Kong, US and Japanese law and was led by Teresa Ko and partners Heiner Braun, Junzaburo Kiuchi and Edward Cole. They were assisted by associates James Mythen and Geoffrey Cheung, international legal consultant Christina Fu and trainee solicitor Alex Norman in Hong Kong, as well as associates Mariko Nakano, Takahiko Itoh, Kenta Komatsu and Mina Hoshizawa in Japan.
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