Fangda has advised JP Morgan to set up China’s first wholly foreign-owned securities company. On August 6, 2021, JPMorgan announced that the China Securities Regulatory Commission (CSRC) had approved its application to be the sole controlling shareholder of JPMorgan Chase Securities (China) Co., Ltd.
Fangda Partners acted as the legal counsel to JPMorgan Chase and participated in the whole process from the establishment of the securities company to effecting the transfer of shares from five domestic shareholders to JP Morgan. The team was led by partner Zhiyi Ren.
Fangda represented MBK Partners in its acquisition and privatization of CAR Inc. (“CAR”, HK Stock Code：00699), the largest car rental company in China.
MBK Partners firstly acquired an approximately 20.9% stake in CAR, and then acquired the remaining outstanding shares of CAR through a voluntary general offer and compulsory acquisition for a total consideration of approximately USD 1.1 billion. Such compulsory acquisition was completed on July 5, 2021, and CAR was delisted from the Stock Exchange of Hong Kong and became a wholly-owned subsidiary of MBK Partners on July 8, 2021.
Founded in 2005, MBK Partners is one of the largest private equity funds in Asia with over US$24 billion of capital under management. MBK Partners focuses on North Asia and has developed expertise in various industries, including consumer and retail, telecommunications and media, financial services, healthcare, logistics and industrials. The aggregate revenues of MBK Partners’ 38 portfolio companies exceed US$47.2 billion.
Fangda team was led by corporate partners Jeffry Ding, Patrick Li, banking partner Rock Wang, and antitrust partner Michael Han. Fangda team handled the PRC legal due diligence, transaction structure discussion and the review of transaction documents.
On June 28, 2021, the Beijing No.1 Intermediate People’s Court approved the Restructuring Plan of Peking University Founder Group Co., Ltd. (the “Founder Group”) and other four companies. The Founder Group was once the largest university-run enterprise in China, and the bankruptcy restructuring of Founder Group is one of the most complicated bankruptcy restructuring cases in China.
Shenchao Technology Investment Co., a wholly-owned subsidiary of Shenzhen Major Industrial Investment Group, acted as a co-investor in the Founder Group and on its acquisition of all equity previously held by the Founder Group in Founder Microelectronics in the bankruptcy restructuring of the Founder Group.
Shenzhen Major Industrial Investment Group is an investment platform for leading industries owned by the Shenzhen municipal government. Its investments focus on major industries such as integrated circuits, with the aim of empowering breakthrough technologies. Founder Microelectronics is a national high-tech enterprise engaged in the manufacturing of integrated circuit chips. It has the first 6-inch device production line in China, with business implantation of its 13 silicon carbide product series, which leaps into the front rank of the 6-inch production line in China.
Fangda’s Shenzhen and Guangzhou offices in the Greater Bay Area worked closely together to advise Shenchao Technology on all aspects of the transaction. The Fangda team is led by corporate partner Qiang Ma and dispute resolution partner Ivan Su, and the core members include Shirley Feng, Terry Ling, Kevin Liu and Jiaqi Wen.
Fangda Partners acted as the PRC counsel to the New York Stock Exchange-listed company XPeng Inc. (“XPeng”) on its global offering of 85 million Class A ordinary shares (including an international placement and Hong Kong initial public offering), marking XPeng’s dual primary listing on both the New York Stock Exchange and Hong Kong Stock Exchange. The deal raised gross proceeds of approximately HK$14 billion (approximately US$1.8 billion), and will raise approximately US$2.1 billion in total if the over-allotment option is fully exercised. The listing and global offering was closed on July 7, 2021.
XPeng is one of China's leading smart electric vehicle companies. According to data from IHS Markit, XPeng is currently the only Chinese automobile company that independently develops full-stack autonomous driving technology software and applies the software to its mass-produced vehicles. XPILOT 3.0, the latest self-developed autonomous driving system developed by XPeng, is one of the most advanced autonomous driving technologies used in cars currently sold on the market.
After advising on XPeng’s successful listing on the New York Stock Exchange in 2020 and subsequent additional issuances, Fangda has continued to act as XPeng’s PRC legal counsel in this deal. The team advising on this transaction was led by partners Jeffrey Ding, Tianyi Chen and Patrick Li and counsel Jianbo Wei. They were supported by team members including Cassie Chang, Wei Feng, Charlene He, Hale Lu in our Beijing office, and Xinyu Guo, Yinglin Kong and Muyuan Zhang in our Shenzhen office.
Fangda acted as Hong Kong and US counsel to Chaoju Eye Care Holdings Limited (Stock code: 2219) on the listing of Chaoju Eye Care’s ordinary shares on the Main Board of the Stock Exchange of Hong Kong and the concurrent global offering. The listing and global offering raised approximately HK$1.81 billion (prior to exercise of the underwriters’ over-allotment option).
Chaoju Eye Care is a leading ophthalmic medical service group in North China with a strong reputation nationwide. Since the inception, Chaoju Eye Care has adhered to the vision of "taking our century’s heritage to bring light to the world and inspire hope" and provided patients with safe, reassuring and affordable ophthalmic medical experience with professional and effective equipment and technology as well as caring and considerate services.
The listing and the closing of the global offering took place on July 7, 2021. Haitong and Huatai acted as joint sponsors of the listing, as well as joint global coordinators, joint bookrunners and joint lead managers of the global offering.
The Fangda team was led by partners Peter Chen, Christine Chen and Arman Lie and the team members comprised of associates Brian Kwok, Siyu You, Ning Linzy, trainee Lizzie Cheong and paralegal Andrew Chan.
Fangda advised Zhejiang Cangnan Instrument Group Co., Ltd. ("Cangnan Instrument", stock code: 1743.HK) on its privatization through general offer by way of buy-back of all issued H-shares. Cangnan Instrument were officially delisted from the Hong Kong Stock Exchange at 9 a.m., July 5, 2021.
Cangnan Instrument’s unprecedented privatization offer by way of a share buy-back was the first-ever privatization transaction structure using such a mechanism on the main board of Hong Kong Stock Exchange. This innovative structure provides more flexibility for companies that intend to delist (for example, for listed companies with relatively dispersed shareholding structures) as an alternative privatization mechanism to shareholder general offers or schemes of arrangement. At the shareholders’ meetings of Cangnan Instrument in May, the privatization transaction was unanimously approved by the participating shareholders, and the offer acceptance rate of the H-share shareholders was almost 100% - indicating the value of this privatization mechanism, which is set to establish a precedent in the Hong Kong market.
Cangnan Instrument is a leading Chinese company specializing in the manufacture and sale of a variety of industrial and commercial gas flow meters, as well as having R&D, manufacturing, sales and after-sales service divisions. The delisting from H-share market will help the company save regulatory and compliance costs, increase its flexibility and efficiency in future business development, and enhance its core business development capabilities and competitiveness.
Fangda’s Hong Kong Capital Markets team acted as the Hong Kong legal counsel of Cangnan Instrument (the offeror) in this transaction, utilizing the firm’s leading strength in the privatization of Hong Kong-listed companies and synergistic cross-office advantages. In the transaction, we provided a full range of services, including: taking the lead in the design of the transaction structure; acting as the main contact party to communicate and liaise with the Hong Kong regulators including Securities and Futures Commission and the Hong Kong Stock Exchange; drafting and finalizing transaction documents; and assisting in transaction funding arrangements. The Fangda team was led by partners Peter Chen and Lawrence Wang. Partner Laurence Yuan provided support on transaction funds. Team members included Brian Kwok and Andrew Chan.
On September 25, 2020, the China Securities Regulatory Commission (“CSRC”), the People's Bank of China and the State Administration of Foreign Exchange issued the Administrative Measures for Securities and Futures Investment Operated in China by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors. On the same day, the CSRC issued the Provisions on Issues concerning the Implementation of the Administrative Measures for Securities and Futures Investment Operated in China by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors. These regulations have made major adjustments to the application requirements and investment scope of qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII). The rules were both implemented on November 1, 2020.
On May 14, 2021, Blackstone Alternative Solutions L.L.C. was recognized as a qualified foreign institutional investor (QFII). It was among the first batch of US-funded institutions to obtain qualified foreign institutional investor (QFII) recognition since the new regulations were implemented in 2020.
Fangda Partners advised Blackstone on its qualification application, including application materials review, legal compliance advice, and supplier agreements’ verification. The Fangda team was led by the investment management team partner Zhiyi Ren and the investment fund team partners Richard Guo and Candy Tang.
Fangda represented Ping An Life Insurance Company of China on its acquisition of an equity stake in China Raffles Group from CapitaLand. The property portfolio includes Raffles City Shanghai, Raffles City Beijing, Raffles City Ningbo, Raffles City Chengdu, Raffles City Changning (Shanghai), and Raffles City Hangzhou. Each of them is an integrated business center, comprising business offices, hotels, and other different real estate components. The total asset value of the portfolio is RMB46.7 billion, in which Ping An Life Insurance has invested about RMB33 billion. The transaction was signed and is expected to close in the third quarter of 2021. CapitaLand will continue to operate and manage the six properties.
The six underlying properties in the transaction are all part of the "Raffles" brand, CapitLand’s core property line. These properties were recognized as one of the 2020 Brands of the Year: China Most Influential Shopping Center by a Chinese award agency. The properties are located in central business districts in China’s major cities. The six properties have recorded high occupancy rates since 2019 of between 90% and 95% even during the COVID-19 pandemic. The assets are attractive to Ping An Life Insurance since they offer steady investment returns over the long term, which is fully in keeping with Ping An’s investment perspective.
Fangda handled all aspects of the transaction for Ping An, including transaction structure design, legal due diligence, transaction documentation, insurance compliance, merger control filing and closing related matters. The cross-practice, cross-office (including Shanghai, Beijing and Hong Kong) Fangda team was led by partners Maria Wang and Zhenyu Wang supported by real estate and construction partners Yingying Wang and Frank Fan, financial institution group partner FANG Jian, antitrust partners Michael Han and Jin Wang, and corporate/M&A partner Hao Zhang.
We regularly advise strategic inbound and outbound investors, international private equity sponsors, institutional investors and other investors on their cross-border acquisitions, disposals and other forms of investments, including of and in real estate assets and portfolios in Mainland China, Hong Kong SAR and offshore jurisdictions. We are familiar with complex cross-border transaction structures and common law-related concepts. Together with our superior China real estate expertise, we are renowned for our ability to act both as PRC counsel and international counsel in cross-border real estate transactions. We regularly advise on real estate transactions of values of at least RMB5 billion.
Fangda has advised a buyer consortium on its proposed take-private of leading human resource service provider 51job, Inc. (NASDAQ: JOBS). The consortium comprises DCP Capital, Ocean Link, and 51job’s chief executive officer, Rick Yan. Recruit Holdings Co., Ltd. also participated in the deal as the current shareholder. The deal was announced on June 21, 2021.
Founded in 1998, 51job is a leading provider of integrated human resource services in China. With a comprehensive suite of HR solutions, 51job meets the needs of enterprises and job seekers through the entire talent management cycle, from initial recruitment to employee retention and career development. 51job was listed on NASDAQ on 2004. Under the merger agreement, except the continuing shareholder, the buyer consortium will pay US$79.05 per common share/American Depositary Share (ADS) to acquire the remaining shares and ADSs in 51job, implying a deal value of about US$5.7 billion. 51job will be delisted from NASDAQ after the privatization.
Fangda Partners acted as PRC legal counsel to the buyer consortium, including providing due diligence, advising the buyer consortium on the financing plan and transaction agreement, and analyzing the Chinese merger control issue. The Fangda team was led by partners Leo Lou, Dalin Cong, Caroline Huang, Stanley Chen and Gil Zhang, and team members included Zichao Wu, Lena Chen, Jichao Chang, Hanzhi Jiang, Brown Lin, Huihui Li, Kaixian Zheng, Yizhu Mao, Harry Xu, and others.
Fangda has market-leading experience in advising on delisting and follow-up financing for many overseas listed companies, including: ShangPharma Corporation, Focus Media Holding Ltd, Giant Interactive Group Inc., United Family Healthcare, Wuxi AppTec Co., Ltd, Mindray Medical International Ltd, Qihoo 360 Technology Co. Ltd, Homeinns Co., Ltd, Trina Solar Co., Ltd, Bona Film Group Ltd, Aupu Group Holding Company Ltd, Intime Department Store, Yingde Gases Investment Ltd, Ak Medical Holdings Ltd, eHi Auto Services Ltd, Jumei International Holding Ltd, 58.com Inc., Haier Electronics Group Co., Ltd, Changshouhua Food Company Ltd, and China Biologic Products Holdings, Inc., among others.
On June 7, 2021, DBS Group announced that DBS Securities (China) Co., Ltd. (“DBS Securities”), its newly established securities company in China, has obtained the securities business license from the China Securities Regulatory Commission and is now authorized to operate securities brokerage businesses, securities investment consulting businesses, securities proprietary trading as well as securities underwriting and sponsorship services. The registered capital of DBS Securities is RMB1.5 billion. DBS Bank Ltd., a Singapore incorporated financial institution, is the largest controlling shareholder (holding 51% of the total equity interests). In 2007, DBS Bank established DBS Bank (China) Co., which is one of the first bank subsidiaries established by foreign banks.
Fangda has been assisting DBS Securities in the preparation of its set-up since May 2020. This is the second strategic investment project in China in which we have advised DBS Group recently. DBS Group has made a public announcement in April 2021 that the investment by DBS Bank in Shenzhen Rural Commercial Bank, making DBS the largest shareholder in the bank with 13% of the total shares, has been approved by the Monetary Authority of Singapore and the China Banking and Insurance Regulatory Commission. Fangda represented DBS Group in this transaction.
On June 10, 2021, BlackRock CCB Wealth Management Co., Ltd. held an opening ceremony in Shanghai to formally launch its business. Blackrock holds a majority (50.1%) stake in this new joint venture wealth management company. The minority equity interests are held by China Construction Bank (40%) through Jianxin Wealth Management Co., its wholly-owned wealth management subsidiary, and Temasek (9.9%).
The joint venture combines BlackRock’s advanced expertise in international asset management, investment management and risk control with CCB’s advantage in domestic customer base and distribution channels. The company aims to serve China’s fast-growing wealth and asset management sector, offering sophisticated products and services to Chinese customers and to help facilitate the development of China’s real economy. Temasek will also contribute its experience and knowledge to create long-term value for this joint venture wealth management company’s future development. Fangda has been advising BlackRock on this strategic investment project from the start. This is the second strategic investment project in China in which we have advised BlackRock recently.
BlackRock also announced on June 11, 2021 that it has obtained the approval to launch its first wholly foreign-owned fund management company. Through this fund management company, Blackrock wishes to provide Chinese investors with personalized onshore investment products and solutions, and continue to develop its business and expertise in the local market.
In addition to the above investments, as China’s financial services sector continues to open up, Fangda’s Financial Institutions Group has assisted many international financial institutions to set up companies, on their M&A deals involving domestic financial institutions, as well as helping many financial institutions to obtain various financial licenses, including commercial banking, insurance, securities, futures, funds, wealth management, private banking, and commercial payments, among others. The leading partners included FANG Jian, Grace Yu, Siyuan Pan and Ada Zou.
Fangda represented BMW Group on its RMB3.5 billion panda bond offering, priced on June 10, 2021. BMW Finance N.V., a BMW Netherlands finance company subsidiary, was the issuer, with the bonds guaranteed by its parent. The bonds comprise RMB2 billion 3-year medium-term notes (MTNs) and RMB1.5 billion 1-year commercial paper (CP). The MTNs were priced at an annual coupon rate of 3.44% and the CPs at 3.03%. The bonds were offered to institutional investors in and outside China (including through the Bond Connect regime) on China’s interbank bond market. The offering was more than three times over-subscribed with approximately half of the orders from overseas investors.
This is the first public offering of panda bonds by a European non-financial institution (non-FI) corporate, as well as the first public offering of panda bonds by an international non-FI corporate issuer under the new corporate panda bond rule adopting a tiered management regime. It is also the first public offering of guaranteed panda bonds issued by a finance company and guaranteed by its parent. BMW has previously been an active issuer of panda bonds through private placements.
Fangda, as the issuer’s counsel, drafted all the transaction documents in English and Chinese and advised BMW Group on all aspects of the transaction. The Fangda team was led by the partner Christine Chen with key members including Helen Zhao, Sophie Li and Hailey Ma. Helen Wang and Leanne Liu provided support in deal execution.
Fangda acted as lead counsel to Midea Group Co., Ltd. ("Midea", stock code: 000333.SZ) on its deal to acquire a controlling stake in Beijing Wandong Medical Technology Co., Ltd. ("Wandong Medical", stock code: 600055.SH) for RMB2.3 billion. The transaction was signed and announced on February 2, 2021, the controlling shares were registered for transfer on May 6, 2021, and delivered on May 12, 2021
The transaction was implemented by means of negotiated transfer of A-shares. After the transaction, Midea Group became the controlling shareholder of Wandong Medical, and Mr. Xiangjian He, the actual controller of Midea Group, became the actual controller of Wandong Medical. In all, Midea Group acquired 29.09% of shares in Wandong Medical, which included: (1) 24.09% shares in aggregate from Wandong Medical’s former controlling shareholder Jiangsu Yuyue Technology Development Co., Ltd. and Mr. Guangming Wu, Wandong Medical’s former actual controller, and (2) 5% shares from Wandong Medical’s former second shareholder Mr. Rong Yu. As part of the deal, Yuyue Technology and Guangming Wu became, respectively, the controlling shareholder and actual controller of the A-stock listed company Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. (stock code: 002223.SZ). Rong Yu has taken over as the actual controller of the A-stock listed company Meinian Onehealth Healthcare Holdings Co., Ltd. (stock code: 002044.SZ ).
Midea Group is an international technology company, and its business portfolio comprises five major divisions: smart home, electro-mechanical, HVAC & building technologies, robotics & automation, and digital innovation. Established in 1955, Wandong Medical is a renowned and leading supplier of X-ray generator and other medical imaging equipment, as well as delivering a medical imaging diagnostic service. It is a leading market player in the healthcare sector. Wanlicloud, a subsidiary of Wandong Medical, is a leading remote medical imaging big data service platform in China.
- Midea’s investment in Wandong Medical is part of the company’s strategy to make a splash in the medical industry and is an important move in reshaping its technology innovation business.
- As the transaction was completed in the context of the desire by China to boost its domestic medical equipment manufacturing sector, both companies have demonstrated their ambition to boost China’s domestic medical equipment manufacturing capability, extend medical resources to the country’s rural areas, provide more advanced healthcare services to the general public, and facilitate the development of Chinese healthcare and medical industry more generally.
Fangda Partners advised Buhuo Venture Capital on the final closing of its Phase I US Dollar-dominated venture capital fund, which raised more than US$100 million. Buhuo’s transaction was backed by two US-based funds of funds and one Asia-based fund of funds. Two limited partnerships (LPs) from Buhuo’s Phase I RMB Fund also participated in the new fund.
Following the closing, Buhuo has become both an RMB and US dollar fund management firm. In the transaction, Buhuo transferred partial stakes in four assets from its initial RMB fund, Buhuo Ventures RMB Fund Phase I, a 2017-founded vehicle, to fund two-thirds of the US dollar fund’s assets, with the remainder being follow-on capital . Buhuo is the latest Chinese general partner (GP) using yuan-to-dollar structuring to raise capital from a more diversified LP base.
Buhuo Venture CapitaI, co-founded by Jay Li and Ray Yi in 2017 and headquartered in Beijing, invests in angel and VC start-ups, with a focus on the Chinese supply chain industry. Many of its investees, such as Zhongneng United, Guoquan, Carzone, HuiIian, Iboxpay, DoIphin Inc., Youxi Movie Hotel, Zhangshangfucai, Wanqian Fasteners, Baishunyangche, and Sharkfit, have become the leading companies in their specialist areas of operation.
Fangda’s investment fund team and corporate financing team provided (together with other firms) the full range of transaction services and legal advice to Buhuo Venture Capital in drawing up all transaction documents and negotiation of the US dollar fund formation, as well as on the yuan-to-dollar fund structuring. The Fangda team was led by investment fund partners Richard Guo and Yue Zhang, and corporate financing partners Avica Wang and Shihua Wang, and other key members included Icy Huang, Serena Zhou, Shirley Lim, Duncan Deng, Kai Wang, Alaric Zhang, and Xin Yue.
Fangda advised China Merchants Bank in an acquisition financing to facilitate the privatization Special Purpose Vehicle (SPV) set up by the shareholders and investors in China Distance Education Holdings Limited (CDEL, NYSE: DL). CDEL has de-listed as part of the go-private transaction.
China Merchants Bank provided financing to facilitate CDEL's go-private process. CDEL completed the acquisition and privatization on March 19th, 2021. Following the acquisition, CDEL de-listed from the New York Stock Exchange and trading of its American depositary shares was suspended.
Founded in 2000, CDEL is a leading provider of online education and value-added services for professionals and corporate clients in China. CDEL owns 20 websites of its subsidiary brands, and offers more than 300 professional development courses across 13 disciplines, covering accounting, healthcare, engineering & construction, legal, start-ups, elementary and high school, higher education diplomas or degrees and postgraduate entrance examination.
The go-private transaction structure, involving many buyer consortium members, financing guarantee arrangement, and loaning process included dozens of entities across multiple jurisdictions. Each stage in the process was highly complex. Fangda acted as lead PRC counsel to China Merchants Bank and coordinated all local counsel support, including local firms in Hong Kong, BVI, Cayman Islands, Seychelles and other jurisdictions. The Fangda team was led by Shanghai-based partner Rock Wang, and team members included Harry Xu, Katherine Huang, Jenny Ding and Joelle Cheng.
In one of the most influential deals in the video games industry, Fangda advised Moonton Technology on its acquisition by ByteDance's video games unit Nuverse. The deal was announced on 22nd March, 2021.
Following the acquisition, the Shanghai-based Moonton Technology will continue to operate independently. The company already has several offices in Indonesia, Singapore, and Hong Kong SAR, and is most famous in Southeast Asia for its multiplayer online battle arena (MOBA) game. Moonton Technology will provide the strategic support needed in video games, electronic sports and other areas to help ByteDance accelerate its global gaming offerings.
Fangda acted as deal counsel to Moonton Technology, advising on bidding and due diligence aspects in connection with several potential buyers, which included ByteDance, and advised on transaction negotiation and documentation, as well as providing antitrust and IP-related advice. The Fangda team was led by corporate partners Norman Zhong, Helen Fan and Raymond Chan, supported by antitrust partners Michael Han and Jin Wang, and entertainment law & IP partner Devan Shao. Other key members included Joyce Pei, Kitty Ng, Hao Zhang and other associates.
China Merchants Bank Co., Ltd. (“CMB”) has issued a public announcement on March 19, 2021, according to which,
- CMB contemplates to bring in a strategic investor JPMorgan Asset Management (Asia Pacific) Limited (“JPMAMAPL”) to increase the registered capital of CMB’s wholly owned subsidiary CMB Wealth Management Co., Ltd. (“CMB Wealth Management”) in cash;
- JPMAMAPL will make a capital contribution of around RMB2.667 billion, of which around RMB0.556 billion shall be calculated in the registered capital of CMB Wealth Management. After the capital increase, JPMAMAPL will hold 10% equity interest in CMB Wealth Management; and
- Such capital increase shall be filed with China Banking and Insurance Regulatory Commission for approval.
Fangda represented the Asian Development Bank (ADB) on its RMB2 billion panda bond offering on China’s interbank bond market, issued on March 10, 2021. It is:
- the first panda bond issued by an international development institution following the implementation of new panda bond rules for foreign governments and international development institutions at the end of 2020 in China
- ADB’s largest-ever borrowing in an Asian local currency
Fangda acted as PRC legal counsel to New Horizon Health Limited in connection with its initial public offering and listing on the Hong Kong Stock Exchange (stock code: 6606). New Horizon’s shares commenced trading on February 18, 2021, jumping 185% on its debut. New Horizon’s IPO was significantly over-subscribed, raising around HK$2 billion (assuming no over-allotment option is exercised).
New Horizon is a market leader in cancer screening, focusing on the design, development and commercialization of cancer screening tests. The company obtained the first registration approval issued by the National Medical Products Administration (NMPA) for early screening tests in November 2020.
The Fangda team was led by corporate partners Jeffrey Ding and Diana Li and IP partner Sherry Yao, and other key members included Travis Xu, Siyu Chen, Jeanette Wang, Ziyan Yuan, Emily Xue and Ting Ji.
Fangda assisted the HSBC Group to set up China’s first wholly foreign-owned Fintech company. HSBC Fintech Services (Shanghai) Co., based in Shanghai’s Lingang New Area pilot free trade zone, was set up on September 7, 2020 and officially launched on January 9, 2021. The subsidiary has a registered capital of US$34 million.
The establishment and business operation of HSBC Fintech is the first initiative by a multinational financial group to capitalize on the opportunities presented by China’s fast-growing Fintech sector. HSBC Fintech will offer centralised technology and data services. Its first product is aimed at providing health and wealth protection for employees. HSBC Fintech will also support HSBC Private Banking’s wealth planning division with technological innovation and roll out support to licensed financial institutions within and outside the Group.
Fangda’s highly regarded financial regulatory team advised on all Chinese law aspects of setting up HSBC Fintech, including securing regulatory approval, registration, compliance and advising on internal governance. The Fangda team was led by partners Zhiyi Ren and Lily Yin, and included associates Zoe Shi and Siyu Gao.
Fangda has advised Amundi BOC Wealth Management Co., the first Sino-foreign JV wealth management company, on the successful issue of its first wealth management product. This is a publicly offered closed-end net-worth wealth management product with an annualized performance comparison benchmark of 4.65%.
Amundi BOC is the first JV wealth management company established by a Chinese commercial bank and an overseas financial institution. The two shareholders are Credit Agricole Asset Management Co., the largest European asset management company (which holds 55% of the shareholding), and Bank of China Wealth Management Co., a subsidiary of Bank of China (which holds 45%). It is registered in Lingang New Area in the Shanghai Pilot Free Trade Zone with registered capital of RMB1 billion.
Fangda advised Amundi BOC on the product issuance, including on custody, sales, investment and valuation documents. The team comprised partner REN Zhiyi and counsel Allen Wang of Fangda’s asset management practice.
Fangda represented a buyer consortium led by Shanghai Wanye Enterprises, a leading Chinese scientech company, on its approximately US$398 million acquisition of Compart Systems from Platinum Equity. The acquisition is part of Wanye’s strategic objective to push ahead in its semiconductor equipment and integrated circuit businesses. The deal was signed on November 12, 2020 and announced on December 23, 2020.
Singapore-headquartered Compart Systems is a leading global supplier of highly engineered gas delivery system and flow control components and assemblies. It is one of a few global companies with the vertical integration manufacturing capability of highly engineered components. Compart’s primary operations are in the PRC and Malaysia. Platinum Equity is a Los Angeles-based global private equity firm.
The Fangda M&A team was led by partners Norman Zhong, Raymond Chan and Chuck Sun, supported by counsel Frank Ding, associate Joyce Pei, Danny Li and Siyao Li. Fangda advised on legal due diligence, transaction negotiation and documentation, underwriting of insurance aspects, and offshore equity financing, as well as PRC regulations. Fangda coordinated local counsel support, including Allen & Gledhill in Singapore, Rahmat Lim & Partners in Malaysia, and Covington & Burling as the U.S. counsel.
Leading Chinese law firm Fangda Partners advised NavInfo Co. Ltd., a market-leading Chinese navigation software and map company, on its successful copyright infringement claim against three Baidu companies found to be using “substantially similar software” without permission. The Beijing Intellectual Property Court awarded NavInfo RMB64.5 million (US$9.8 million) in damages, the highest damages award for copyright infringement cases in China to date.
NavInfo brought the case against Beijing Baidu Netcome Technology Co., Ltd., Baidu Online Network Technology (Beijing) Co., Ltd., and Baidu Cloud Computing Technology (Beijing) Co., Ltd.
The court held that the electronic maps developed and owned by NavInfo constituted a graphic work under the Copyright Law. The defendants’ software—“Baidu Map,” “Baidu Carlife,” “Baidu Navigation,” and other software using electronic maps—was substantially similar to, and used without authorization, NavInfo’s electronic maps, thus infringing NavInfo’s copyright.
In addition to awarding damages, the court granted an injunction enjoining the Baidu companies from infringement and ordered the defendants to issue a public apology.
Founded in 2002, NavInfo is the market leader in navigation maps, navigation software development, dynamic traffic information, location big data, and customized connected vehicle services for both passengers and commercial vehicles.
Partner Alexandra Yang commented: “We are pleased to have been entrusted by our client to help enforcing this high-profile, complex copyright infringement case, which successfully serves to protect the core IP rights of our client, and solidify the social consensus of protecting the core IP rights of electronic maps.”
The Fangda team was led by partner Alexandra (Pu) Yang.
Fangda has advised a buyer consortium on its proposed take-private with leading biopharmaceutical company China Biologic Products Holdings, Inc. (“China Biologic”). The consortium comprises Centurium Capital, CITIC Capital, Marc Chan, Hillhouse Capital, Temasek Holdings, and other financial institutions and management members. The deal was announced on November 19, 2020.
China Biologic’s products are used as critical therapies during medical emergencies and for the prevention and treatment of life-threatening diseases and immune deficiency-related diseases. China Biologic was founded in 2002 and listed on NASDAQ in 2009. Under the merger agreement, the buyer consortium will pay US$120 per share to acquire a 68.84% stake in China Biologic, implying an equity value of China Biologic of about US$4.8 billion.
Fangda Partners acted as PRC legal counsel to the buyer consortium, including providing due diligence, and negotiating and drafting the financing transaction agreement and the bank loan agreement. The Fangda corporate team was led by partners Leo Lou and Diana Li, and team members included Elaine Wang, Shuwen Hu, Tingting Huang, Siyu Chen, Xiaobo Wen, Jiali Yang, and Yifei Huang. The banking & finance team was led by partner Stanley Chen, supported by Harry Xu.
Fangda acted as Hong Kong counsel to JW (Cayman) Therapeutics Co. Ltd. (Stock code: 2126) on the listing of JW Therapeutics’ ordinary shares on the Main Board of the Stock Exchange of Hong Kong and the concurrent global offering. The listing and global offering raised approximately HK$2.3 billion (prior to exercise of the underwriters’ over-allotment option).
JW Therapeutics is a leading clinical and pre-clinical stage cell therapy company in China, with a vision to develop innovative cell therapies for the China market to transform the treatment of cancer for Chinese patients.
The listing and the closing of the global offering took place on November 3, 2020. Goldman Sachs and UBS acted as joint sponsors of the listing and, together with CICC and Citic Securities, as joint global coordinators, joint bookrunners and joint lead managers of the global offering.
The Fangda team was led by partner Colin Law, and the team members comprised counsel Jonathan Wallenberger, associates Alan Au, George Chen and Yilin Lu, and paralegal Tracy Ho.
Fangda represented iRay Technology Company Limited in its initial public offering and listing on the SSE STAR Market (Shanghai Stock Exchange Science and Technology Innovation Board) on September 18, 2020.
The IPO raised a total of RMB2.2 billion from the issue of 18.2 million shares. This is the largest IPO project in the special equipment manufacturing industry on the SSE STAR Market to date.
iRay Technology is China’s top manufacturer of digital X-ray detectors, is one of the world’s leading enterprises in the research, development and production of digital X-ray detectors, and one of the world’s few digital X-ray detector manufacturers that has mastered the four core sensor technologies. The company’s listing on the SSE STAR Market is significant as China localizes the production of core components of high-end medical devices.
Fangda advised and represented iRay Technology in its pre-IPO financings, onshore and offshore restructuring and the IPO. The Fangda team was led by partners Qiang Ma and Ke Luo, supported by associates Yuhan Zhang and Kevin Liu.
Fangda, as lead legal counsel, represented TCL Technology Group Co., Ltd. (“TCL Technology”) and China Star Optoelectronics Technology Co., Ltd. (“TCL CSOT”), a subsidiary of TCL Technology, in their acquisition of Samsung Display’s LCD plant in Suzhou for US$1.08 billion. The Suzhou plant comprises Samsung’s only 8.5th generation LCD production line in mainland China. The deal was signed on August 28, 2020, subject to customary closing conditions.
TCL Technology and TCL CSOT’s strategic acquisition of the Samsung 8.5th generation LCD plant underscores TCL Technology’s strategic aim to become a global leading technology industry group. On completion, TCL CSOT will operate three 8.5th generation large-size display production lines, capable of manufacturing 440,000 large panels a month.
The deal was led out of Fangda’s Greater Bay offices in Shenzhen and Hong Kong. Fangda provided the full range of transaction services and legal advice to the buyer as well as coordinating Korean local counsel. The deal was concluded on a very tight timescale. The Fangda team was led by partners Qiang Ma and Wei Chen, and team members included Qin Liu, Anqi Hu, Haipan Hu, Lijuan Sun, Duncan Deng and Viola Jiang. Partners Michael Han and Jin Wang and team members Yun Dong and Joy Wong supported the corporate team to coordinate antitrust clearance in multiple jurisdictions worldwide .
Fangda has advised AstraZeneca, the British-Swedish multinational pharmaceutical and biopharmaceutical company, on a licensing deal with Shenzhen Kangtai Biological Products Co., Ltd. (“BioKangtai”), under which AstraZeneca will aim to supply the adenovirus vector-based COVID-19 vaccine, AZD1222, to China. AZD1222 is currently being developed by the University of Oxford, with whom AstraZeneca signed an agreement in April to build a number of supply chains in parallel across the world. BioKangtai has agreed to build capacity to make at least 100 million doses of the vaccine by the end of 2020 and 200 million doses per year by the end of 2021, for the China market. The two companies said that they will explore the possibility of cooperation in other regions and markets. At the moment, Phase II and III clinical trials of COVID-19 vaccine are being undertaken in many countries, with the objective of testing the vaccine’s effectiveness and the safety and immune response of the vaccine for different age groups as well as inoculation rates.
Leon Wang, Executive Vice-President, International and President of AstraZeneca China, said: “We hope to leverage BioKangtai’s technology and manufacturing capability to enable the supply of AZD-1222 in China. We believe that with the cooperation of governments, international organizations, NGOs, and companies around the world, we can overcome the challenges created by the COVID-19 pandemic. We aim to make the University of Oxford’s vaccine widely accessible around the world in an equitable manner.”
Fangda advised AstraZeneca on all aspects of the licensing deal, including providing due diligence, drafting, amendment, and translation of the framework agreement, and handling negotiation. The team was led by partner Josh Shin, supported by team members Bella Wang, Muriel He, and Jiali Yang.
Fangda is advising EF Education First (“EF”) in connection with a major investment by the global investment firm Permira in the EF Kids & Teens Business, which is headquartered in Switzerland with schools in China and Indonesia. Permira will acquire a majority stake in the EF Kids & Teens business, with EF retaining significant ownership in the business. The completion of Permira’s investment remains subject to customary conditions.
With over 20 years of successful operations, EF Kids & Teens is a market leader in premium English language education with 288 schools across 62 cities in China and 79 schools in Indonesia and one of the largest networks of international teachers. Over the past few months, EF Kids & Teens has successfully helped hundreds of thousands of students lean online through EF’s proprietary learning platform and live EF teachers from around the world.
Founded in Sweden in 1965, EF Education First is a leading international education company which focuses on academics, travel and cultural experiences. Globally, EF has 600 offices and schools in 50 countries, as well as a research and development unit headquartered in Switzerland. In China, EF has three divisions: Kids and Teens Schools, Adults Education and Study Abroad.
Permira is a global investment firm. Founded in 1985, the firm advises private equity funds and makes long-term investments with a total committed capital of approximately USD48 billion. The Permira funds have made over 250 private equity investments in four key sectors: Consumer, Services, Healthcare and Technology.
The Fangda corporate team is advising on international cross-border as well as domestic Chinese aspects of this landmark transaction, and includes Hong Kong-based partner Mark Lehmkuhler, Beijing-based partner Chen Bao and Shanghai-based partner Sherry Xu; Beijing-based partners Michael Hanand Caroline Huang are providing antitrust advice on the transaction.
Fangda advised WuXi AppTec on its placement of 68.2 million H-shares at a price of HK$108 each. The placement, which concluded on July 29, 2020, raised HK$7.4 billion. The agents included Morgan Stanley, Huatai Securities, Goldman Sachs, and J.P. Morgan.
WuXi AppTec is a global pharmaceutical, biopharmaceutical and medical devices company, providing comprehensive laboratory research and R&D services from drug discovery through development to market delivery.
Fangda’s mainland China and Hong Kong teams worked together to advise WuXi AppTec, a longstanding client. The mainland China team was led by Xueyan Jiang, and team members included Yvonne Gan, Yanhui Hu, Janice Jia, and Ellyn Ai. The Hong Kong team was led by Colin Law and Arman Lie, and team members included Brian Kwok, Ting Him Chan, Karen Chan, and George Chen.
Fangda represented Huatai United Securities as sponsor and lead underwriter in Sunshine Guojian Pharmaceutical (Shanghai) Co., Ltd. (Sunshine Guojian)’s initial public offering and listing on the SSE STAR Market (Shanghai Stock Exchange Science and Technology Innovation Board) on July 22, 2020. The IPO raised over RMB1.7 billion.
Sunshine Guojian is one of the first batch of Chinese biopharmaceutical companies manufacturing antibody drugs, and already has three regulator-approved therapeutic antibody drugs in China. The company’s R&D concentrates on developing antibody drugs, particularly aimed at the treatment of autoimmune diseases and tumors. It is the largest of all the biopharmaceutical companies in China, and has some 10 antibody drugs under development.
Sunshine Guojian is the first STAR market-listed company in the biopharmaceutical industry to be spun off from a Hong Kong-listed company (3SBio Group).
Fangda represented China International Capital Corporation Limited as joint sponsor and lead underwriter in Semiconductor Manufacturing International Corporation (SMIC)’s initial public offering and listing on the SSE STAR Market (Shanghai Stock Exchange Science and Technology Innovation Board) on July 16, 2020. The IPO raised over RMB46 billion (over RMB53 billion after the exercise of the over-allotment option). SMIC’s IPO is the largest on the STAR Market to date.
SMIC is one of the world’s leading integrated circuit (IC) companies, as well as being the most advanced semiconductor manufacturer in China. SMIC is the first overseas listed red chip enterprise to enter the A-share capital market through this type of offering.
Fangda advised on all aspects of the offering, including legal research, corporate governance, and consultation with all domestic and international securities regulatory agencies.
Fangda acted as PRC legal counsel to Morgan Stanley & Co. LLC and BofA Securities, Inc. as underwriters on the IPO and listing of Agora, Inc. (Agora) on the Nasdaq Global Select Market in the US on June 26, 2020.
In the listing, Agora offered 17.5 million American Depositary Shares (ADSs), raising approximately US$350 million (before the greenshoe option), as well as selling approximately $110 million worth of shares in a private placement.
Agora, a leading voice, video and live interactive streaming platform, provides developers with simple-to-use, customizable and widely compatible APIs (application programming interfaces) to embed real-time video and voice into their applications without the need to build the infrastructure themselves. Agora is the first company in the real-time, platform-as-a-service (PaaS) sector to list.
Fangda represented Haier Electronics Group Co., Ltd. (HK Stock Code: 1169) (“HEG”) in the privatization of HEG by way of a scheme of arrangement and the withdrawal of listing of HEG (the “Privatization”).
As consideration for the Privatization, Haier Smart Home Co., Ltd. (“HSH”) will issue 1.60 new HSH H Shares and make a Cash Payment of HK$1.95 per HEG share. The Privatization of firm intention was announced on July 31, 2020 and the scheme document was despatch on November 16, 2020.
In the Privatization, HEG is estimated to be valued over US$11 billion, this is the largest scale privatization of a Hong Kong listed company as of July 31, 2020.
The Fangda team on this deal was led by partners Colin Law, Edward Bong, Xueyan Jiang, Jian Fang, Siyuan Pan, the team members comprised associates Hong Ding, Eric Li, Yao Zhang and Yvonne Gan. Fangda advised on the transactions, prepared for the transaction documents and other related documents.
Fangda acted as PRC legal counsel to Credit Suisse Securities (USA) LLC and China International Capital Corporation Hong Kong Securities Limited as underwriters on the IPO and listing of Genetron Holdings Limited (Genetron) on the Nasdaq Global Select Market in the US on June 19, 2020.
In the listing, Genetron offered 16 million American Depositary Shares (ADSs), raising approximately US$256 million (before the greenshoe option) and making it the largest IPO offering globally for a precision oncology company.
Genetron is a leading Chinese precision oncology company, focusing on cancer molecular profiling and harnessing advanced technologies in molecular biology and data science to improve cancer treatment.
Fangda advised Huatai Financial Holdings (Hong Kong) Limited and UBS AG London Branch as joint global coordinators, along with other joint bookrunners, on all PRC legal issues related to the issuance of global depositary receipts (“GDRs”) by China Pacific Insurance (Group) Co. Ltd. (“CPIC”) on the London Stock Exchange. CPIC raised US$1.8 billion (prior to any exercise of the over-allotment option) or US$2 billion (assuming full exercise of the over-allotment option) through the issuance on the Shanghai-London Stock Connect Segment (Shanghai Segment) of the London Stock Exchange. The net proceeds will be mainly used to develop CPIC’s businesses overseas and support its core insurance business growth. The GDRs commenced trading in London on June 22, 2020 (London time). This is the largest capital raise via an admission to London Stock Exchange in 2020 to date.
Founded in 1991, CPIC is an insurance holding company incorporated on the basis of China Pacific Insurance Company, and a leading insurance group in China.
CIPC's GDR issuance is innovative in connection with Shanghai-London Stock Connect in a number of respects: it is the first GDR to adopt Chinese accounting standards; it introduces a cornerstone investor mechanism with a long-term lock-up arrangement; and it is the first to receive a public float waiver as a non-European company.
After the listing on LSEG, CPIC has become the first ever A+H+G (‘Shanghai+Hong Kong+London’) simultaneously listed insurance company and the second Chinese company to list GDRs in London utilizing Shanghai-London Stock Connect.
Fangda represents Asian Infrastructure Investment Bank (AIIB) on its RMB3 billion panda bond offering on China’s interbank bond market. This is the first panda bond offering by an issuer rated AAA by international credit rating agencies after the promulgation of the current panda bond rules.
The 3-year sustainable development bonds carry the Combating COVID-19 label approved by the National Association of Financial Market Institutional Investors and zero percent risk weighting in China.
The issuance received extraordinary support from both onshore and offshore investors (including through the Bond Connect Regime)， and were subscribedwith 35% allocated to domestic and 65% to international investors. The bonds were priced at a coupon rate of 2.40% per annum, 23 bps lower than the valuation of China Development Bank bonds, reflective of AIIB’s strong credit fundamentals.
The net proceeds will be included in the ordinary resources of AIIB, supporting to fund part of COVID-19 Crisis Recovery Facility, to upgrade the country’s sustainable public health infrastructure and provide emergency equipment and supplies in response to the COVID-19 pandemic. RMB2.5 billion of the proceeds will be used as the COVID-19 containment development in China.
The successful issuance of the Panda bond , showcasing milestone significance, contributing to enhancing global investor base such as multilateral development banks and prestigious global issuers to enter Chinese debt market, as well as the internationalization of China’s capital markets.
On November 15, 2019, pursuant to the Shanghai Bankruptcy Court’s order under the Enterprise Bankruptcy Law (“EBL”), CEFC Shanghai International Group Limited (“CEFC”) went into bankruptcy liquidation. On November 24, 2019, the Shanghai Bankruptcy Court appointed the Shanghai Office of King & Wood Mallensons, AllBright Law Offices, and Fangda Partners as joint administrators of the CEFC Bankruptcy Case.
According to an application by the joint and several administrators of CEFC Shanghai International Group Limited (the “Administrators”) to seek recognition and assistance in Hong Kong, the High Court of the Hong Kong Special Administrative Region (HKSAR) ( “High Court”) made and issued the Order on December 18 and 20, 2019, and rendered the Decision accordingly on January 13, 2020, in which the Court recognized the liquidation in the Mainland of the People’s Republic of China (the “Mainland”) and the appointment of the joint and several administrators appointed by Shanghai No.3 Intermediate People’s Court (“Shanghai Bankruptcy Court”) and recognized that the Administrators have and may exercise the relevant powers in the HKSAR. All proceedings in HKSAR against CEFC are now pending. This was the first application in Hong Kong made by Mainland administrators for recognition of their appointment and judicial assistance under common law.
In order to prevent a creditor from obtaining a garnishee order absolute, on December 10, 2019 the Shanghai Bankruptcy Court issued a Letter of Request urgently to the High Court to request the High Court recognize the appointment of the Administrators and to allow the Administrators, to the greatest extent permitted under Hong Kong laws, to be entitled to the rights under the EBL and judicial interpretations. Based on the Letter of Request and other relevant materials, the Administrators made an urgent application to the High Court for recognition and assistance.
The Honorable Mr. Justice Harris granted the recognition and assistance sought by the Administrators. In essence, the orders invested in the Administrators the same powers in cross-border insolvencies as Hong Kong liquidators. This case is expected to promote a unitary approach in cross-border insolvency, and also be referred to as a precedent in the HKSAR, which will be cited in similar cases in the future.
For the first time in history, a bankruptcy liquidation in the Mainland has been recognized by a Hong Kong court in the HKSAR. It is also the first time in the history of Hong Kong courts that they will provide judicial assistance to the Mainland bankruptcy proceedings.
Fangda represented China International Capital Corporation (CICC) as sole sponsor and lead underwriter in the IPO and listing of China Resources Microelectronics (CRM) on the SSE STAR Market (Shanghai Stock Exchange Science and Technology Innovation Board) on February 27, 2020, raising approximately RMB3.8 billion (RMB 4.3 billion from the Full Exercise of the Over-Allotman Option). CRM is a semiconductor company incorporated in the Cayman Islands and with its principal business operation in the PRC. CRM is China’s first red-chip to list on the A-share market, paving way for other overseas-listed red-chip companies to return to the home market.
