Four law firms have counselled parties involved in state-owned Shenyang Automobile’s RMB16.4 billion (USD2.3 billion) acquisition of indebted Huachen Automotive Group, making it the largest such industry restructuring in China’s auto industry.
After the acquisition was completed on 15 March, Shenyang Automobile acquired all of Huachen Automotive’s assets including Shanghai-listed companies Shenyang Jinbei Automotive and Liaoning Shenhua.
Huachen’s 29.99% stake of Hong Kong-listed Brilliance China Automotive is also part of the deal, while Brilliance China also holds a 25% stake in BMW Brilliance Automotive.
Senior partner Shi Yanling led the Jincheng Tongda & Neal team advising Shenyang Automobile on PRC law.
Slaughter and May advised Shenyang Automobile on Hong Kong law, with senior partner Benita Yu leading the team, which included partner Vincent Chan. Kejie Associates acted for Liaoning Fund Investment, which indirectly owns Shenyang Automobile.
King & Wood Mallesons partners Liu Yanling and Yin Juquan were two of the 11 restructuring administrators that were part of Huachen’s liquidation team. Huachen Automotive Group, a major carmaker in China, defaulted on debts in 2020, which led to a restructuring plan that included 12 of its associate companies. However, creditors repeatedly rejected the proposals until Shenyang Automobile stepped in.
Huachen Automotive’s total liabilities stood at about RMB63 billion as of mid-2023.
