Capital Markets: Debt & Equity
Xiaoqin LIU
Senior Partner
liuxiaoqin@zlwd.com
Recent case highlights
Beijing Yizhuang Investment Holding Co., Ltd. (“the Client”) is a Beijing state-owned enterprise dedicated to the operation and management of new industrial cities. On December 19, 2020, Motic Microscopes (“Motic”)’s controlling shareholder, Motic Holdings Co., Ltd., and its major shareholder, Speed Fair Co., Ltd., signed a share transfer agreement with the Client for an aggregate transfer price of approximately CNY 1.35 billion. Xiaoqin LIU from Zhonglun W&D was appointed by the Client to provide professional legal services for this transaction.
Main Legal Services
- Designed the transaction plan and was responsible for the due diligence of the listed company’s domestic as well as overseas subsidiaries and assets. Organized and coordinated the due diligence of the listed company’s offshore assets carried out by German, Spanish, Canadian, American, and Hong Kong attorneys as the attorney engaged in the transaction.
- Responsible for drafting, revising, and finalizing transaction documents such as share transfer agreements, waiver of voting rights agreements, and responsible for commercial negotiations.
- Issued a legal opinion on the state-owned share management scheme.
- Represented the acquirer in completing the declaration of concentration by business operators for the transaction.
- Assisted the parties in completing the various delivery, registration, and other procedures in the later stage of this transaction within a relatively short period of time.
Capital Markets: Debt & Equity
Haijun Zhang
Senior Partner
zhanghaijun@zlwd.com
Recent case highlights
Beijing Research Institute of Construction Mechanization Co., Ltd. (“the Client”) is the only wholly-owned subsidiary of China Academy of Building Research Co., Ltd. which is mainly engaged in the production and testing of construction machinery and equipment, and is a strong scientific research institution in the field of construction mechanization in China. The Client decided to carry out a mixed-ownership reform by introducing strategic investment to establish a modern enterprise operation mechanism. Haijun Zhang and his team provided special legal services for this reform.
Main Legal Services
- Implemented legal due diligence on the strategic investors and issued a legal due diligence report.
- Participated in the research and discussion on the introduction of strategic investors and the overall plan of employee stock ownership plan.
- Drafted and revised the capital increase agreement and employee stock ownership plan documents.
- Drafted corporate governance documents such as the articles of association, rules of procedure of the three meetings, and the decision-making system of “major issues, appointments, and dismissals”.
Business Highlights and Difficulties
In this project, the introduction of strategic investment and employee stock ownership platforms are implemented simultaneously, and it is necessary to balance the interests of external investors and employees. For strategic investors, LIU’s team needs to judge the integrating degree of the investors with the company’s financial strength and strategic cooperation through due diligence, and then bring substantial benefits to the post-mixed ownership reform enterprise. For employees, it needs to reasonably design the shareholding plan, grasp the scope of incentive targets, pricing basis, the timing of contribution, platform management mechanism, exit mechanism, etc. For the corporate governance after the mixed-ownership reform, it is necessary to design and arrange the corporate governance mechanism flexibly under the principle of meeting the requirement of the state capital supervision. This has put high demands on the professional legal quality and communication and coordination ability of LIU’s team.
Through this mixed-ownership reform, LIU’s team helped the Client to further standardize the internal management, give full play to the advantages and brand influence of the shareholder parties, stimulate and mobilize the enthusiasm of the employees, and lay a solid foundation for achieving leapfrog development of technological innovation, transformation, and upgrading.
