On the evening of December 24, 2018, three onshore and offshore listed companies including China Merchants Shekou Industrial Zone Holdings Co., Ltd. (001979), Shenzhen Chiwan Wharf Holdings Limited (000022), and China Merchants Port Holdings Co., Ltd. (HK.0144) simultaneously issued public announcements, releasing information on the deals engaged by such companies related to the land readjustment and joint venture & cooperation project with respect to the land plots in the Qianhai Shenzhen-Hongkong Modern Service Industry Cooperation Zone (“Qianhai Zone”).
The execution of the Land Readjustment Agreement and Join Venture & Cooperation Agreement are major milestones of this project. Upon the consummation of this project, the joint venture will be responsible for the development and construction of all land plots within the scope of cooperation, with a total land area of 926,700 s.m. and total construction area of 4,977,600 s.m.; upon doing so, the Qianhai Zone will be ready for rapid kick-off of its development and construction.
This project is a major benchmark and unprecedented in history; having broken many historical records in the land market and securities market.
Firstly, this project blazes the trail in the urban transformation and upgrade, along with land readjustment on the basis of strategic cooperation between the government and private enterprises, and also realizing major innovation on strategic cooperation between the government and private enterprises after completion of the land readjustment;
Secondly, the land under cooperation was considerably large in size, with the total area in scope for land readjustment and cooperation being 29,000 s.m.;
Thirdly, the transaction value is tremendous. The appraised value of the land use rights of the land within the scope of the joint venture & cooperation was nearly RMB100 billion as of January 1, 2015;
Fourthly, a large amount of work was involved in this transaction with a very complex structure. Dozens of parties and governmental and regulatory authorities were involved in this project, dealing with a number of complex matters including reclaim of the land use rights from the rights owners prematurely by the state, statutory provisions for land development fees under the state policy, functional replacement of land, readjustment of planned purposes of land, capital contribution in kind by land use rights, housing for general headquarters for industries, and cooperation between the government and private enterprises.
Fifthly, very complicated transaction procedure and disclosure matters were involved in this project. Three listed companies, both onshore and offshore, were involved in in this project, so the transaction plans and specific matters required approval formalities for listed companies, and regulatory formalities for transactions involving state-owned assets, and the information disclosure needed to comply with the exchange rules both onshore and offshore.
As legal counsel for the investment inviting party, since the launch of this project, JunHe has participated and will continue to participate in the whole process of this project in a leading role. JunHe has helped the client complete the legal due diligence investigation on the land use rights of the land within the scope of readjustment, the demonstration and analysis on the plans for land readjustment and joint venture & cooperation, internal liaison and coordination with the relevant governmental and regulatory authorities, design of transaction structures, drafting, review, revision and execution of the transaction documents, incorporation of the joint venture and the platform companies, information disclosure for the three listed companies, etc.; and JunHe will continue providing legal services for the project. JunHe has won recognition and praise from the investment inviting party and other intermediaries for its professional expertise, preciseness and efficiency, abundant experience in delivering creative solution for major complex issues, as well as flexibility in quickly responding to urgent matters.
The leading counsel for this project are partners LI, Lishan, and ZHANG, Huili and the partner mainly handling the case. Partners HU, Yijin and WEI, Wei have also provided strong support and assistance at different stages of this project.