On December 10, 2019, China Merchants Commercial Real Estate Investment Trust ("CMC REIT", stock code: 01503.HK) was listed on the main board of the Hong Kong Stock Exchange ("Hong Kong Stock Exchange") (the "Project"), and offered for sale of a total of 750 million new fund units at a price of HK $ 3.42 per fund unit, and raised a fund in a total amount of approximately HK $ 2.565 billion.
CMC REIT is the fourth mainland REITs listed on the Hong Kong Stock Exchange after Yuexiu REIT, Spring REIT and Huixian REIT. It is the first REITs to be publicly issued at the Hong Kong market in recent 6 years, and also the first REIT of a central enterprise. The successful listing of CMC REIT has opened up a brand new way of thinking for real estate finance. REITs can not only revitalize existing property assets, solve funding sources through innovative approaches, but also provide real estate developers with stable external funding channels, which therefore are conducive to the rapid return of funds; for investors, REITs products also have such significant advantages as low investment threshold, high dividend ratio and high liquidity.
JunHe as the Chinese legal adviser of Citigroup Global Markets Asia Limited, the sole listing agent in this Project, assisted it in completing the legal due diligence investigation of CMC REIT's domestic and overseas structuring, domestic rights and interests, drafting, reviewing and revising application documents, issuance documents and transaction documents related to this listing, assisted it in reviewing and modifying the disclosure documents and resolution documents of China Merchants Shekou Industrial Zone Holdings Co., LTD. ("China Merchants Shekou", stock code: 001979.SZ), issuing Chinese legal opinion, assisted in responding to feedbacks from The Securities and Futures Commission of Hong Kong (“SFC”) and the stock exchange of Hong Kong on the application for listing of the Project. JunHe has been recognized by the real estate trust fund manager, the listing agent and other professional institutions for its rigorous and efficient working style, and ultimately assisted CMC REIT to be successfully listed on the main board of the Hong Kong stock exchange.
The key points and difficulties of the project work include:
This Project is actually the internal reorganization of the A-share listed company - China Merchants Shekou in respect of its five domestic underlying assets and the listing of REIT, which must take into account the relevant rules concerning A shares, of the Hong Kong Stock Exchange (where the REIT is listed), and Cayman / BVI (Registered Address of REIT Administrator’s Affiliates), and which also involved communications with the relevant government authorities and regulatory authorities both home and abroad;
Due to the complexity of work lines involved in this Project, in addition to obtaining the relevant approvals from The Securities and Futures Commission of Hong Kong and the Stock Exchange of Hong Kong Limited, this Project also involves information disclosure and joint internal decision -making procedures of the two listed companies, i.e., China Merchants Shekou (001979.SZ) and China Merchants Land Limited (00978.HK);
This Project involves a large number of transaction documents, including but not limited to the documents for the reorganization of real estate investment trust assets (including asset and debt transfer), trust deed, purchase and sales agreement, loan agreement, preemption agreement, property management agreement, continuous related party transaction agreement, etc. JunHe assisted clients in continuous communication with onshore and offshore listed companies and lawyers, and promote the finalization of the ransaction documents.
The leading partner for this Project was Ms. XIE, Zheng, and the undertaking partner was Ms. ZHANG, Huili, and Mr. HU, Yijin also provided great support to this Project.