Three law firms advise Tencent Music’s homecoming listing on HKEX

Three law firms advise Tencent Music’s homecoming listing on HKEX

Davis Polk, Han Kun Law Offices and Maples Group advised NYSE-listed Tencent Music Entertainment Group’s debut on the HKEX in a secondary listing by introduction, meaning no new shares will be issued or funds raised.

New York will remain Tencent Music’s primary listing venue and its shares debuted at HKD18 each on the HKEX. One of the online music company’s US-listed shares represented two of its Hong Kong shares.

Davis Polk acted as Tencent Music’s Hong Kong and US counsel, Han Kun was consulted on PRC law, and Maples Group was the Cayman Islands legal counsel.

Freshfields advised the joint sponsors, JP Morgan and Goldman Sachs, on Hong Kong and US law, while CM Law Firm advised on PRC law.

Slaughter and May advised Tencent Music’s parent company, Tencent Holdings, led by Hong Kong based-partner Peter Brien and Beijing-based partner Jing Chen.

Tencent Music’s choice of listing by introduction was supported by its abundant cash flow as its prospectus said net profit from 2019 to 2021 was RMB4 billion (USD567 million), RMB4.2 billion and RMB3.2 billion, respectively.

The company’s shares were priced at USD13 each on its IPO on the NYSE in 2018, but it has now slumped two-thirds to USD4.58 as of 20 September.

Listing by introduction is a way of listing shares already in issue on another exchange. No marketing arrangement is required as the shares for which listing is sought are already widely held. The listing approval procedures for a new listing by introduction are the same as those for IPOs.

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