KWM advises PAMC on formation of insurance asset-backed scheme

King & Wood Mallesons (KWM) has advised Pacific Asset Management Co (PAMC) on setting up an asset-backed scheme for a special funding project through raising insurance funds.

The project is said to be the first asset-backed scheme that has been approved by CIRC and established by an insurance asset management company with an equity fund as the investment target.

The asset-backed scheme was indented to enable PAMC, as the trustee, to invest in Oriza SF Equity Investment Corporation (a limited partnership) in Suzhou Industrial Park with the raised insurance funds in a total amount of RMB550m (£56m) in terms of the contribution from limited partnership (target fund). Through equity investment, the target fund eventually invested in SF Holding (Group) and its affiliated companies (SF Express).

SF Express is a private express delivery company in China. The funds raised in this transaction’s financing is circa RMB8bn in total, and in addition to PAMC 10 other partners of the target fund have participated in this financing in various ways. SF Express will leverage this financing opportunity and continue to reinforce and expand its core business resources.

During the process of this project, KWM actively assisted PAMC in multiple rounds of communications with the CIRC with respect to the project’s specific implementation plan and requirements for approval.

It also supported the client in multiple rounds of negotiations and provided professional advice in revisions of complicated equity structure and multiple trenches of ROI standards, as well as rights and obligations among partners of the target fund.

Eventually, KWM facilitated the setup of the asset-backed scheme for this project and helped achieve the objective of negotiation as PAMC had expected.

KWM acted as the counsel for the investor. The project was led by partner Zhang Yi.