Schoenherr advises PALFINGER on mutual capital interlinking with SANY

Schoenherr has advised PALFINGER and individual-selling PALFINGER shareholders on the establishment of a mutual capital interlinking between the Salzburg-based manufacturer of hydraulic lifting systems and SANY Heavy Industries Co, a member of China’s SANY group. 

The overall value of the transaction amounts to approximately €220m (£180m).

The mutual capital interlinking was implemented through multiple measures. On the one hand, the PALFINGER group subscribed to and acquired a 10 per cent interest in the share capital of SANY Automobile Hoisting Machinery, the SANY group unit specialised in mobile, tower and crawler cranes.

On the other hand, SANY Germany subscribed to 1,863,258 newly issued PALFINGER shares in the course of a capital increase and acquired a further 1,863,258 shares from existing PALFINGER shareholders.

The implementation of PALFINGER’s capital increase was also complex due to the fact that, while the shares were issued for a cash price of €29 per share, the legal requirements applicable to a capital increase by contribution in kind had to be observed. In addition, all three parts of the transaction (share purchases from several shareholders, as well as the two capital increases in Austria and China) had to be interconnected, co-ordinated and jointly implemented.

PALFINGER’s capital increase as well as all share purchase transactions were completed and became effective on 14 May 2014.

Schoenherr advised PALFINGER and the selling shareholders and was responsible for structuring, drafting and negotiating the relevant contracts, as well as for the overall management of the transaction process. This included the transaction’s implementation under company law, on-site negotiations with PALFINGER’s Chinese partners, the drafting of the transaction documentation and co-ordinating the admission to trading of the newly issued shares.

The Schoenherr team was led by Robert Bachner (partner, corporate/M&A) and further consisted of Franz Urlesberger (partner, competition), Rita Wittmann (attorney at law, corporate/M&A), Clemens Rainer (associate, corporate/M&A) and Manuel Ritt-Huemer (associate, corporate/M&A).

SANY was advised by Dorda Brugger Jordis (Vienna).

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