Deal highlights

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Capital Markets

Trinity Acquisition has submitted its application for a SPAC listing on the Stock Exchange of Hong Kong, one of the first applications under the new SPAC listing regime. Goodwin advised Trinity Acquisition on Hong Kong and US law. Ogier advised on Cayman Island law. Freshfields acted as legal adviser to the joint sponsor for Hong Kong and US law.

JL Mag Rare-Earth Company completed a dual primary listing on the main board of the Stock Exchange of Hong Kong alongside its offering on the Shenzhen Stock Exchange, with the help of Herbert Smith Freehills. The IPO raised more than HKD4.04 billion (USD512 million) and started trading in January. JL Mag is ranked first in the world in rare earth permanent magnet (REPM) production with a 14.5% market share. The magnets produced by JL Mag are used in new energy vehicles, wind turbine generators and air conditioners, and their consumption is expected to increase by 98% by 2025.

Linklaters advised the People’s Bank of China (PBOC) in issuing RMB5 billion (USD790 million) six-month bills in Hong Kong through the Central Moneymarket Unit’s BID service operated under the Hong Kong Monetary Authority. The bills have an interest rate of 2.5%. It is the eighth bill issuance by the PBOC in Hong Kong in 2021, raising a total of RMB120 billion. Such a large issuance has contributed to the growing market of renminbi investment products and liquidity management tools in Hong Kong. It has also provided additional options for mainland Chinese financial institutions and enterprises to issue RMB bonds in other offshore markets.

China Mobile listed on the main board of the Shanghai Stock Exchange in January raising a total of about RMB56 billion (USD8.8 billion), making it the largest A-share IPO of the past decade. Haiwen & Partners advised the issuer, and King & Wood Mallesons acted for the sponsor. Sullivan & Cromwell advised China Mobile on Hong Kong and US law.

In January, Sidley represented Axion Global in securing regulatory approval from the Hong Kong Securities and Futures Commission to manage 100% virtual asset portfolios in Hong Kong. It was one of the first times approval to manage virtual assets was granted in Hong Kong. The approval bolsters the expanding virtual asset fund management sector in Hong Kong.

Linklaters advised CMB International Securities (CMBIS) and BOCI Asia (BOCI) in devising an HKD4.86 billion (USD623 million) employee incentive for China Mengniu Dairy and the structuring and placing of convertible bonds in connection with the scheme. This scheme is the first in Hong Kong to utilise bankruptcy-remote special purpose vehicles (SPVs), convertible bonds, and qualified domestic institutional investor (QDII) structures to provide a viable method of enabling both onshore and offshore employees of Hong Kong-listed Chinese companies. CMBIS set up an orphan SPV to purchase the convertible bonds issued by Mengniu and placed by BOCI, and issue repackaging notes backed by the convertible bonds to Mengniu’s onshore employees through QDIIs.

Mergers & Acquisitions

HSBC was helped by Haiwen to fully acquire its life insurance joint venture, HSBC Life, through purchasing the remaining 50%, expanding its non-core banking services. The Shanghai Regulatory

Bureau of the China Banking and Insurance Regulatory Commission approved HSBC to take full ownership of its life insurance joint venture partner, the National Trust. HSBC took full ownership through a structured transfer of equity interest. The December deal follows new guidelines set up by China on foreign ownership allowing overseas companies to take full control of their local life insurance ventures.

CITIC Group, assisted by Baker McKenzie, has invested RMB42 billion (USD6.6 billion) into China Huarong Asset Management, resulting in CITIC becoming one of the key shareholders in China Huarong, which is one of the four biggest state-owned asset management companies in China. China Huarong core business includes distressed asset management. It also provides financial services, and asset management and investment. Besides CITIC, it has also received investments from other investors including China Insurance Investment, China Cinda, China Life Insurance and ICBC Investment.

Linear Capital, a Chinese investment firm that focuses on technology startups and big data intelligence, was advised by Hogan Lovells to close two of its US dollar funds ‒ Fund V and Annex Fund II ‒ raising a total commitment of USD500 million. The commitments came from university endowments, sovereign and pension funds, foundations with altruistic purposes, family offices and multi-manager investment. The funds closed in December, and Linear Capital plans to invest the money into tech companies in Greater China.

In Brazil, Linklaters advised China Tobacco International (HK) to indirectly acquire a 51% stake in China Brasil Tabacos Exportadora (CBT) from China National Tobacco Corporation (CNTC) at USD63 million. CBT is a joint venture by CNTC and Alliance One Group, a subsidiary of Pyxus International. CBT primarily engages in the procurement, processing, sale and export of tobacco leaves, and the sale of agricultural materials related to tobacco production.