Renhe Commercial Holdings was the first eligible Hong Kong Stock Exchange issuer under the Shanghai-Hong Kong Stock Connect to conduct a rights issue. Psyche Tai and Rachel Chan explain the ‘trilogy’ of transactions that ensued, and offer their observations of the stock connect
The multi-faceted structure was one of the first of its kind in the capital and finance markets. The three facets, comprising a rights issue, banking financing and tender offers, were inter-conditionally structured, the rationale for which was primarily driven by the commercial objectives of Renhe and the lending banks.
The ultimate purpose of the transactions was for Renhe to buy back its outstanding senior notes, due in May 2015 and March 2016, through a cash tender offer. Given the amount required for financing the tender offer, it was considered to be most feasible at the time to adopt a mix of equity and debt funding, taking into account the interests of Renhe’s shareholders. The tender offer was intended to be financed by the utilisation of proceeds raised from the rights issue – on a two for one basis with discount – and a combination of syndicated and bilateral loans, and so structurally, the tender offer was conditional upon: (a) the rights issue becoming unconditional under the underwriting agreement and the same being not terminated shortly after the expiration of the tender offer; and (b) drawdown of the bank financings.
You must be a
subscribersubscribersubscribersubscriber
to read this content, please
subscribesubscribesubscribesubscribe
today.
For group subscribers, please click here to access.
Interested in group subscription? Please contact us.
你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章，欢迎成为我们的订阅会员成为我们的订阅会员。
Psyche Tai is a partner and Rachel Chan is a senior associate at Norton Rose Fulbright. Both lawyers participated in this deal.
