On the evening of December 30, 2019，China Merchants Shekou Industrial Zone Holdings Co., Ltd (“Merchants Shekou” Stock Quote: 001979) announced their plans to work with Shenzhen Qianhai Development Investment Holdings Co., Ltd. (“Shenzhen Qianhai”), to jointly increase capital of Shenzhen Qianhai Shekou Free Trade Investment ("the Joint Venture"). This signifies that the Qianhai joint venture and cooperation has also passed smoothly after the completion of Qianhai’s land preparation in the first half of 2019. At this point, Qianhai’s land preparation and joint venture cooperation projects have been successfully completed.
This project is a significant and novel project, which sets a precedent for future projects of land consolidation for the purpose of strategic cooperation between government and enterprises during urban transformation and improvement. This has achieved major innovations to create an innovative package that solves the issue of land-use change and land right determination in Qianhai, laying an important foundation for the accelerated development of the Qianhai Mawan Area.
This project has created many historical records of the land market and capital market including:
The joint venture amount is valued over RMB 146.8 billion.
After the completion of this project, the investment of China Merchants Qianhai Industry (“Merchants Qianhai Industry”) and Qianhai Investment Control (“Qianhai Investment”) in the joint venture will amount to more than RMB 146.8 billion. In particular, this joint venture involved the major asset restructuring of Merchants Shekou with a transaction value exceeding RMB 145.8 billion, making it the largest transaction amount of a major asset restructuring of 2019 as well as the largest annual transaction scale to date.
The maintenance area involved was 2.9 square kilometers.
The total consolidated land area is 2.9 square kilometers and its planned uses involve the conversion of the land into commercial, office and residential spaces among others. The entire reserve is located in the core area of the Dawan district, which represents a very prominent area with very high value in Qinghai.
3 state-owned listed companies were involved from China and abroad.
During the land replenishment phase, two A-share listed companies were involved.
Merchants Shekou, China Merchants Port Group Co., Ltd., (“Merchants Port”, Stock Quote: 001872) and a Hong Kong listed company China Merchants Port Holdings Co., Ltd., (“Merchants Port HK”, Stock Quote: HK.0144). There are certain differences in the regulatory rules of domestic and overseas capital markets, but the information disclosure needs to conform with the relevant provisions on supervision and administration of listed companies both in China and abroad. The joint venture cooperation phase involved a major asset reorganization of China Merchants Shekou. JunHe cooperated with clients and other intermediaries to complete all the announcement documents of material assets reorganization and reply to exchange inquiries within less than 20 days.
4 years before and after the project.
The land consolidation and joint venture cooperation in Qianhai has been successfully completed today, after about 4 years.
During the course of this project, the JunHe team handled hundreds of transaction plans, drafted, reviewed and revised thousands of transaction documents. The overall workload was huge, the legal problems were complex, and the schedule was very tight, which is rare in the land and capital markets.
As the legal consultant of China Merchants Group, JunHe has participated throughout the project, assisting clients in completing the legal due diligence investigations, the demonstration and analysis of the land consolidation and cooperative cooperation scheme, and the communication and coordination with the relevant government departments or regulatory departments. Junhe also assisted in the invitation of investments, the design of transaction structures, the drafting, review, negotiation, modification and signing of relevant transaction documents, the establishment of the joint venture company and related platform companies, the information disclosure of three listed companies, the investment attraction of the major asset restructuring of Merchants Shekou, and many more.
Junhe’s high-level of professional ability, rigorous and efficient style of work, their experience in solving complicated legal problems, and their flexibility and ability to deal with sudden problems were highly praised by the participants and other intermediaries.
This project was led by lawyers LI, Lishan, ZHANG, Huili, and ZHANG, Jianwei, with the partners being LUO, Yongqiang (managing partner) and LIU, Xin (core partner).
Partners WEI, Wei, Yung Yung Janet Hui and BAI, Hongjuan, and HU, Yijin, also provided strong support and assistance at different stages of the project on professional issues such as the capital market, concentration of business operators, and labor and personnel among others.