KraussMaffei Co., Ltd. (“KMCL”, Stock Code: 600579.SH) successfully completed a major asset disposal on December 31, 2024. In this transaction, KMCL’s indirect shareholder, China National Chemical Equipment (Hong Kong) Co., Ltd. (“CNCE HK”), converted its creditor’s right totally amounting EUR 477.7722 million against KMCL’s wholly owned subsidiary, China National Chemical Equipment (Luxembourg) S.à.r.l. (“CNCE Lux”), into shareholding in CNCE Lux. Upon consummation of the transaction, KMCL would cease to control CNCE Lux, and CNCE Lux would change from KMCL’s wholly-owned subsidiary into its participating subsidiary.

This transaction represents an important strategic measure for KMCL to optimize its asset structure and enhance its operational quality. It also marks the first major asset disposal in recent years in which the control in a wholly owned subsidiary is transferred and disposed via a debt-to-equity structure, which results in the carve-out of such wholly owned subsidiary from the transferor’s balance sheet. This transaction has involved multiple jurisdictions and featured a complex transaction structure.

Fangda comprehensively participated in the Transaction as KMCL’s PRC counsel and the overall lead counsel, and handled the transaction structuring, drafting and negotiation of transaction documents, PRC legal due diligence, coordination with legal counsels from multiple jurisdictions (including Luxembourg, Germany, France, Mexico, Slovakia and Delaware U.S.) for respective local due diligence, and assistance to KraussMaffei in connection with various approving procedures required for the Transaction (including the corresponding domestic approvals or filings in terms of SOE or from NDRC, and relevant overseas examinations and approvals). The Fangda team was led by partners Wang Yingjie and April Dong. Team members included Eunice Dai, Ed Zhang, and Zhang Xiu.