Deal News: Law firms in Hong Kong, China and the US have pulled off the second-largest IPO in the world in 2009. Metallurgical Corporation of China (MCC) has concurrently listed on the Shanghai Stock Exchange (SSE) and the HKSE with a global offering worth approximately US$5.3bn.
Davis Polk & Wardwell brought together team members from its Beijing, Hong Kong, London, New York and Washington DC offices to advise MCC. Davis Polk also collaborated with Slaughter and May, who advised MCC on Hong Kong law issues. This is the first time that both Davis Polk and Slaughter and May have worked with MCC and both law firms have developed a relationship with MCC during the long preparation for this IPO. Jia Yuan dealt with PRC law for MCC.
“One of the most challenging aspects of the transaction was to coordinate the H-share offering on the HKSE with the concurrent A-share offering on the SSE between two sets of regulatory requirements (including disclosure requirements), offering mechanics, market practices and even advisors,” Show-Mao Chen, partner of Davis Polk, said.
This deal was also notable for the complex organisational structure of MCC. MCC is a large industrial group with more than 400 direct and indirect subsidiaries operating in various industries in many countries. "This company has got extensive overseas operations already. Our legal tasks involved a big amount of overseas due diligence as well as liaising with local counsels in getting in the right opinions and the necessary due diligence,” said Benita Yu, partner of Slaughter and May in Hong Kong.
MCC will use the net proceeds from its IPO to expand overseas operations and complete current overseas construction projects including ESSAR Steel’s blast furnace project in India, Thai Nguyen Iron and Steel Complex’s Phase II expansion project in Vietnam and the SINO ore mine construction project in Australia. Part of the net proceeds will also be used to fund key overseas resources development projects such as the Aynak copper mine project in Afghanistan.
This is the largest IPO in Hong Kong in 2009 and a reflection of the recent flurry of activity on the HKSE. “My personal observations on the recent listing activities on the HKSE are that many issuers (including issuers with IPO plans that had hitherto been put on hold) hope to take advantage of the confident sentiments (“animal spirits”) now pervading the equity markets ahead of the less certain recovery in the real economy,” Chen said.
Freshfields Bruckhaus Deringer, Shearman & Sterling and Tian Yuan Law firm acted for the underwriters, Morgan Stanley, Citigroup, CICC and Citic Securities, on this deal.
Davis Polk & Wardwell is currently leading the ALB Deal league tables by total value of deals completed in the last six months. To find out more about submissions to ALB Deals - click here.
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