DEAL NEWS: Paul Hastings and Lovells, with the help of Chinese-based firms Haiwen and Jingtian & Gongcheng have helped Chinese construction giant BBMG on its HK$6.8bn ($US884m) Hong Kong IPO and international Reg S/144A placement. BBMG is a state-owned enterprise controlled by the Beijing Municipal Government and is one the largest suppliers of building materials in China, a leading property developer and a large-scale property investment and management company. BBMG’s IPO is the first H-share listing on the Hong Kong stock exchange this year and the second largest Hong Kong listing overall for 2009 , outranked only by Zhongwang’s HK$9.8bn April offering.
The retail portion of the IPO, which is reportedly one of the most sought-after offerings in recent years, was 100 times oversubscribed and since commencing trading the company’s shares have soared by 60 percent. The excitement that this offering stirred up among investors is perfectly evidenced by the fact that the Hong Kong's 'central-bank' was forced to intervene on at least two occasions this week to prevent the inflow of funds from eager investors from pushing the Hong Kong dollar outside its pre-set peg against the US dollar. The IPO price-per-share was originally HK$6.38 and, but at the time this story was published, the company’s shares were trading at HK$10.50.
A Paul Hastings team led by Raymond Li provided US and Hong Kong law advice to BBMG while Haiwen & Partners advised on PRC law. Lovells partner Jamie Barr led a team which provided US and Hong Kong law advice to the issue’s underwriters UBS, Macquarie Bank and JPMorgan while Jingtian & Gongcheng were retained for PRC law matters.
Paul Hastings’s Li, said that the deal, which was complicated by the large nature of the company as well as the offering’s US component, indicates the innate strength of region’s capital markets.
“The deal was particularly complex due to the size and scope of the company, which comprises more than 100 subsidiaries, and its multi-segmented businesses and operations…and [required] collaboration with the other working group members to navigate and resolve various regulatory issues throughout the process,” he said. “The deal highlights the current strength of the local capital markets.” And Hong Kong’s Hang Seng has seen its fair share of activity. In addition to the listings of BBMG and Zhongwang, Fujian-based companies BaWang and 361 Degrees both kicked off HK IPOs last month raising more than HK$4bn between them.