Law firms have advised on Merdeka Gold Resources’ (MGR) landmark secondary listing of Hong Kong depositary receipts (HDRs) on the main board of the Stock Exchange of Hong Kong (SEHK).
It was not only the first dual listing in Hong Kong by an Indonesia Stock Exchange (IDX) listed issuer, but also the first HDR offering on the SEHK in more than 10 years.
MGR is offering 89.7 million HDRs at a maximum price of HKD26.6 each, indicating a deal size of up to HKD2.4 billion (USD293 million). Each HDR represents 10 ordinary shares of MGR traded on the IDX.
Assegaf Hamzah & Partners, the Indonesian arm of Rajah & Tann Asia, acted as Indonesian legal counsel to MGR with partners Tunggul Purusa Utomo and Intan Paramita leading the team.
“We advised the company on a broad range of Indonesian legal, regulatory and compliance matters relevant to the offering. These included compliance with Indonesian capital markets regulations, corporate governance requirements, disclosure obligations, corporate approvals, regulatory filings and reporting requirements, and other legal considerations necessary,” Utomo told Asia Business Law Journal.
“In addition to providing advice, we have also conducted legal due diligence on the company and its subsidiaries, reviewed transaction documentation, and issued Indonesian legal opinions required for the transaction.”
Utomo said Assegaf Hamzah & Partners also ensured the transaction structure documents and offering documentation, including the prospectus and offering circular, accurately reflected the relevant Indonesian regulatory requirements.
Paramita said one of the notable aspects was its successful execution, despite its complexity and the involvement of numerous parties.
“One of the most significant highlights of this transaction was the successful execution of a highly regulated and complex cross-border capital markets offering involving a broad range of stakeholders based in Indonesia and Hong Kong, including the issuer, international counsel, sponsors, underwriters, regulators, and other professional advisers across multiple jurisdictions,” she told ABLJ.
“The successful listing stands as a landmark transaction that not only achieved the company’s strategic objectives but also set a precedent for future Indonesian issuers seeking access to international capital markets.”
Paramita said the listing presented multiple challenges as well, including managing multiple stakeholders and “navigating the interplay between Indonesian regulatory requirements and the international regulatory and disclosure standards applicable to a Hong Kong listing”.
Latham & Watkins advised the joint sponsors and underwriters. UBS and CITIC Securities were the joint sponsors, while UBS, CLSA, Morgan Stanley and HSBC served as the overall co-ordinators.
Partners Terris Tang and Sharon Lau spearheaded the team with counsel Jeremy Wang and associates Alex Lai, Marie Lim, Chimmy Tao, Lizzy Zhang and Jeffy Katio. Regulatory advice was provided by partner Simon Hawkins and associate Adrian Fong, while partner Michael Hardy assisted with dual listing and financial market infrastructure matters.
“The Latham team advised the joint sponsors and underwriters on a range of complex regulatory and compliance matters arising from the first-of-its-kind dual listing between the Indonesia Stock Exchange and Hong Kong Stock Exchange. This included navigating novel legal and regulatory issues across both Indonesian and Hong Kong frameworks, as well as structuring an offering suitable for both regional and international investors,” Tang told ABLJ.
“We also worked closely with UBS and CITIC Securities to design a bespoke settlement mechanism to facilitate the creation of HDRs from Indonesian-listed shares.”
Tang said the deal stood out for multiple reasons, including opening new possibilities for Southeast Asian issuers.
“It represents a landmark cross-border capital markets transaction that opens a new corridor between Southeast Asian issuers and Hong Kong’s international investor base,” he said.
Hiswara Bunjamin & Tandjung, the Indonesian associate firm of Herbert Smith Freehills Kramer (HSF Kramer), acted as Indonesian adviser to the joint sponsors and underwriters. Partner Dandy Firmansyah led the team and was supported by Ivina Suwana, Muhammad Rahmadan, Anindita Yulidaningrum Purba and Pandu Muhammad Saidarka.
MGR, a subsidiary of Indonesian mining company Merdeka Copper Gold, owns and operates the Pani Gold Mine in Sulawesi, Indonesia.
