Asia deals roundup: China M&A and corporate finance deals

Sullivan & Cromwell has taken the lead counsel role in Chinese asset manager Cinda’s $1.6bn equity sale to four foreign investors, while Paul Weiss and Clifford Chance have assisted in Morgan Stanley Private Equity Asia’s $300m investment in Tianhe Chemicals Group.

China Cinda Asset Management, created by the Chinese government in 1999 to handle non-performing loans at the country’s big banks, has sold a 16.54 per cent stake to four strategic investors: UBS, Standard Chartered, CITIC Capital and the National Social Security Fund. Sullivan & Cromwell, led by Hong Kong partner Chun Wei, advised Cinda in the transaction. The company is reportedly preparing for an IPO in Hong Kong.

Paul Weiss has recently advised Morgan Stanley Private Equity Asia in its $300m investment in Tianhe Chemicals Group, a leading specialty chemicals company in China. Hong Kong corporate partner Jack Lange and Yvonne Chan led the firm’s transaction team, which also consists of tax partners Jeffrey Samuels and David Mayo and litigation partner Mark Mendelsohn.

Tianhe sought out Clifford Chance, Chinese firm Commerce & Finance and offshore firm Ogier – which opened an office in Shanghai in 2011 – to provide legal advice.

Through the transaction, the two sides have formed a strategic partnership and as a result Homer Sun, Morgan Stanley Private Equity Asia’s chief investment officer, will join the board of Tianhe.

In China’s banking and finance sector, a joint team led by White & Case with lawyers from Spanish firm Uría Menéndez and Dutch firm De Brauw Blackstone Westbroek has advised China Development Bank (CDB) providing a $375m loan to Spanish telecommunications giant Telefónica. The transaction is the first publicly announced vendor financing granted to a Spanish company by CDB.

White & Case Beijing partner Li Xiaoming led the firm’s team acting as CDB’s lead counsel. Uría Menéndez’s team was led by Beijing partner Juan Martín Perrotto and Madrid partners Rafael García Llaneza and Sebastián Sáenz de Santa María and advised CDB on Spanish law concerning the financing, corporate and tax matters of the deal. De Brauw Blackstone Westbroek’s team was headed by Beijing partner Geert Potjewijd, who advised the lender on the aspects of the deal involving Dutch law.

Uría Menéndez and De Brauw have a best-friends relationship. Both opened an office in Beijing in 2010, located next to each other.

In Mongolia, Mayer Brown JSM has advised the Development Bank of Mongolia and the Ministry of Finance of the Government of Mongolia on its recent issuance of $580m senior guaranteed bonds. Mongolian law firm ARLEX Consulting Services provided Mongolian legal advice to the issuer.

Allen & Overy (A&O) and Mongolian firm GTs Advocates advised the underwriters in the issuance: Deutsche Bank, HSBC and ING.

“We believe that DBM will be a key channel for international capital flows into Mongolia, and a catalyst for Mongolia’s expected growth in the next decade. This transaction sets the foundation to fund domestic infrastructure investment and represents a milestone in our firm’s broad footprint in Mongolia,” said Hong Kong partner Jason Elder who led Mayer Brown JSM’s team in the issuance.

The same set of law firms were involved in DBM’s issuance of $600m Euro Medium Term Notes (EMTN) late last year.

In Hong Kong, Latham & Watkins and Norton Rose have pulled off the $150m Hong Kong IPO of Inner Mongolia mining company Kinetic Mines and Energy. Latham, led by Hong Kong partners Jane Ng, Stanley Chow and Eugene Lee, acted as the Hong Kong and US counsel to the issuer. Appleby and Jingtian & Gongcheng acted as the Cayman Islands and PRC counsel to the issuer respectively.

The lead underwriters HSBC and UBS turned to Norton Rose and Chinese firm Jun He for legal advice.

In Korea, a group of law firms from the US, UK, Japan, Korea and Cayman Islands have advised on the $370m securitisation of future-flow airline ticket receivables originated by Korean airline Asiana Airlines. The receivables are yen-denominated and arise from the sale of passenger airline tickets on Asiana’s flights between Japan and Korea. The asset backed securities (ABS) are listed on the Irish Stock Exchange. It marks the first Korean airline to have issued US dollar-denominated ABS predominantly backed by yen-denominated air-ticket receivables.

Orrick represented the lead arrangers and the swap providers Standard Chartered Bank and Korea Development Bank (KDB) and the note trustee DB Trustees (Hong Kong).  Kim & Chang was the Korean counsel for the arrangers. Offshore firm Walkers acted for the note issuer on Cayman Islands law. Linklaters advised the credit facility provider KDB on English law, while Japanese firm Anderson Mori & Tomotsune provided Japanese legal advice to DB Trustees.

“We’ve seen a significant rebound in securitization matters recently, with Korea remaining one of the most active markets in Asia,” said Michelle Taylor, head of Orrick’s Asia structured finance and securitisation team who led Orrick’s team in this transaction. 

In Thailand, A&O and Shearman & Sterling have completed the $602m IPO of Tesco Lotus property fund, which is the country’s largest IPO since 2006. The property fund has invested in 17 high-quality Tesco Lotus hypermarket-anchored shopping malls in prime locations across Thailand.

Tesco Lotus, the Thai unit of UK-headquartered retailer Tesco, was advised by an Allen & Overy team, led by Bangkok partner Suparerk Auychai and consisting of lawyers from the firm’s offices in Bangkok, Hong Kong and Singapore.

The underwriters – Phatra Securities, Bank of America Merrill Lynch, Nomura and Royal Bank of Scotland – turned to Shearman & Sterling’s Hong Kong partner Matthew Bersani and Bangkok-based firm Weerawong, Chinnavat & Peangpanor for advice.

In Japan, Norton Rose, through its Tokyo, Calgary and Sydney offices, has advised JX Nippon Oil & Energy Corporation on its $435m investment to acquire a 25 per cent interest in a joint venture with Xstrata Coal in Canada.

The Norton Rose team was led by Tokyo partner Michael Joyce and was supported by Calgary partner Grae Garrett and Sydney partner Adrian Ahern.

Bennett Jones and King & Wood Mallesons advised Xstrata Coal on the Canadian and Australian aspects of the transaction respective.