Walkers acted as Cayman Islands counsel, and Baker & McKenzie as Hong Kong and US counsel, to International Mining Machinery Holdings (IMM) on its recent HK$2.54 billion (US$327 million) Hong Kong initial public offering.
IMM was formed in 2006 to acquire two existing coal mining machinery manufacturers, Jixi Coal Mining Machinery and Jiamusi Coal Mining Machinery. The company, which is backed by private equity investor Jordan Company LP, sold 520 million shares, or 40% of its outstanding share capital, at HK$4.88 per share on 3 February 2010. IMM’s shares commenced trading on the Stock Exchange of Hong Kong on 10 February.
Jordan Company has approximately US$6 billion of capital under management and targets middle market companies with enterprise values between US$100 million and US$2 billion. Jordan remains the controlling shareholder after the listing.
According to Walkers, the IPO underscores the attractiveness of Hong Kong as a listing venue, where more IPO proceeds were achieved in 2009 than on any other global exchange.
“Private equity-backed companies coming to the market via IPOs is a trend that is currently being played out across Asia as firms look to release value from investments made over the past few years,” said partner Denise Wong, who led the Walkers team. “We expect this trend to continue over the first half of 2010.”
The Baker & McKenzie team was led by partners Scott Clemens, advising on US law, and PH Chik, advising on Hong Kong law. The team had responsibility for legal documentation, the drafting of the prospectus, corporate and regulatory issues and general transaction management.
According to Baker & McKenzie, net proceeds from the global share offering will be used to implement IMM’s pre-IPO reorganization; to pay a contingent dividend to pre-IPO ordinary shareholders; to improve and expand the company’s current production facilities and service network; to pay for a pre-IPO acquisition and future acquisitions; and for working capital and general corporate purposes.
IMM is one of the leading designers and manufacturers of longwall coal mining equipment in China, in particular, roadheaders and shearers, the two key pieces of equipment used in underground longwall coal mining systems. IMM’s customer base includes all of the 50 largest coal producers in China. It has also established three joint ventures with leading PRC coal producers to provide aftermarket services in key mining regions.
