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Sino-Ocean Land's IPO

The Background

Kejie lawyers first represented Sino-Ocean Land for its sale of minority equity interests of one of its subsidiaries to Lehman Brothers in 2004. Sino-Ocean Land is one of the leading real estate companies based in Beijing. On September 28th 2007, Sino-Ocean Land was successfully listed on the main board of the Hong Kong Stock Exchange, and the net proceeds amounted to approximately RMB 11.2 billion. It was the second real estate company based in Mainland China that received more than HK$ 10 billion proceeds from IPO in 2007 after Country Garden`s IPO in early April. Sino-Ocean Land is also one of the few red chip companies approved by China Securities Regulatory Commission since 2005.

The Project

From August 2006 to September 2007, Kejie lawyers, as Sino-Ocean Land`s PRC legal counsel, advised the following transactions: (i) from August 2006 to September 2006, assisted Sino-Ocean Land in completing its pre-IPO restructuring.  Sino-Ocean Land was hence changed from a state-holding Sino-foreign joint venture to a wholly-owned foreign enterprise and (ii) from September 2006 to December 2006, assisted Sino-Ocean Land in building its offshore financing structure and completing its RMB 1.6 billion private equity financing. The financial investors of the aforementioned financing included the Morgan Stanley, the Chartered Bank, Merrill and the Credit Suisse Group and (iii) from December 2006 to September 2007, assisted Sino-Ocean Land in completing its IPO and listing on the main board of the  Hong Kong Stock Exchange.

The Challenge

To the lawyer team, there were plenty of challenges in the series of transactions, including:

Complex transaction structure and governmental approval procedure

Many complicated legal issues were involved in the aforesaid restructuring, private equity financing and IPO, including restructuring of state-owned enterprises, foreign direct investment, listing of red chip companies, foreign investment in the real estate market, foreign exchange administration and share incentive plans of overseas state-holding listed companies. The approval authorities include Ministry of Commerce of the People’s Republic of China, State-owned Assets Supervision and Administration Commission, China Securities Regulatory Commission and State Administration of Foreign Exchange. For issues that are not specifically stipulated in present laws and have no precedents for reference, Kejie lawyers, based on their precise reasoning and their rich experience in legal practice, made judgment and resolution accurately and resolutely.

Sensitive transaction time and complex legal environment

Sino-Ocean Land completed its IPO at the high point of a soaring China real estate market, which was undoubtedly a favorable financing environment. On the other hand, however, the government introduced a number of polices and regulations aiming at strengthening its function of macro-control over the real estate market as well as regulating foreign capital access to China’s real estate market, which made the transaction environment more complex.

Pressing time for transaction

Kejie lawyers issued its legal opinion on Sino-Ocean Land’s private equity financing on December 6, 2006, the completion date of the financing as well as the kick-off date of its IPO. To ensure Sino-Ocean achieve its IPO at the best time, Kejie lawyers, together with an excellent intermediary team including Morgan Stanley, Goldman Sachs, BOC International, PricewaterhouseCoopers, DTZ Debenham, Freshfields, Jingtian & Gongcheng and Herbert Smith, assisted Sino-Ocean Land in completing its IPO in 9 months.

The Result

Kejie lawyers advised successfully Sino-Ocean Land’s restructuring, private equity financing and IPO through its capable and vigorous team.

The Team

Kejie team was led by Partner He Jie, and included Cao Lei, Li Xin and Yu Jiazhi.

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