On 10 June, China Jinmao and China VAST jointly announced a proposed scheme of arrangement under section 86 of the Cayman Islands Companies Act which, if approved and implemented, will result in China VAST being privatised by China Jinmao and the withdrawal of the listing of the China VAST Shares on the Stock Exchange. China Jinmao will also make a comparable offer to cancel all of the outstanding employee share options issued by China VAST, and an offer to acquire the outstanding convertible notes issued by China VAST in accordance with the Hong Kong Takeovers Code. The long-term controlling shareholder of China VAST will have most of its shares cancelled as part of the scheme for a lower cancellation price as compared to the other shareholders, but will retain a 9.9% stake in China VAST to ensure that the benefits of synergies and collaboration between China Jinmao and China VAST continue to be realized, with some minority shareholder protection rights, and these arrangements collectively constitute a special deal under Rule 25 of the Takeovers Code. The Scheme will be launched upon the satisfaction of certain pre-conditions including the obtaining of approval from SASAC and NDRC and antitrust approval from SAMR.
China Jinmao is a large-scale developer and operator of quality real estate projects in the PRC and the platform enterprise of Sinochem Holdings Corporation Ltd. in the development of real estate business. Latham has been advising China Jinmao since its listing in Hong Kong in 2007, spanning a number of major corporate finance, M&A and privatization transactions, including recently advising China Jinmao on the HK$825 spin-off Hong Kong IPO of Jinmao Services, and advising China Jinmao on the privatization of Jinmao Hotel and Jinmao (China) Hotel Investments and Management Limited, the first privatization of a business trust in Hong Kong. Latham had also advised China Jinmao on their initial investment into China VAST in 2021 through the acquisition of 29.9% Shares in China VAST and the subscription of guaranteed convertible bonds issued by China VAST.
This proposed privatization of China VAST is also the fifth privatization transaction involving Hong Kong-listed companies which Latham has advised on since 2020, following the privatizations of C.P. Pokphand Co. Ltd, Leyou Technologies, Jinmao Hotel and Jinmao (China) Hotel Investments, and Huarong Investment Stock Corporation.
Latham & Watkins represented China Jinmao in the transaction with a capital markets team led by Hong Kong partners Cathy Yeung and Terris Tang, with Hong Kong associates Bonnie Tse and Jonathan Leung.