China Merchants Bank recently became the first Chinese bank since the global credit crunch to raise funds through a global rights offering.
The US$3.2 billion (RMB21.9 billion) offering was the first global offering by a mainland Chinese bank, and the first rights offering by a mainland PRC company made available to US investors. It comprised a public offering of A-shares listed on the Shanghai Stock Exchange, a public offering of H-shares listed on the Hong Kong Stock Exchange and private placements of shares to institutional investors outside China.
The global coordinators of the offering were UBS AG and China International Capital Corporation. Global financial services provider Citi was the financial adviser for the H-share rights offer and BNP Paribas, JP Morgan, Merrill Lynch and UBS were the joint lead underwriters.
The issuer was advised on US law by Davis Polk & Wardwell, whose corporate Hong Kong and Beijing teams were led by James Lin of the Hong Kong office. The law firm assisted in managing the entire US rights issuing process, including direct involvement with the communications with its qualifying US shareholders.
Herbert Smith acted as Hong Kong counsel to the bank, while Jun He Law Offices were its PRC legal adviser.
Commerce & Finance Law Offices advised the underwriters on PRC law and Freshfields Bruckhaus Deringer advised them on US and Hong Kong law.
The Freshfields team consisted of global co-head of the Capital Markets Group and Hong Kong office managing partner Kay Ian Ng, US securities partner Calvin Lai and associates Richard Wang in Beijing and James Hyre and Xu Yin in Hong Kong.
China Merchants Bank has its headquarters in Shenzhen and is China’s fifth-largest commercial bank in terms of total assets.
