JSTI Group ("JSTI", stock code: 300284) recently received approval from the CSRC for its registration to issue shares to Guangzhou Pearl River Enterprises Group Ltd. ("Zhujiang Industrial"). Zhujiang Industrial is a wholly-owned subsidiary of the State-owned Assets Supervision and Administration Commission of Guangzhou Municipality. It has engaged in infrastructure construction and operational services in the GBA for many years and has regional resource advantages and strong capital and fund strength. JSTI Group is a leading engineering consulting company. In 2012, the company was officially listed on the Growth Enterprise Market of the Shenzhen Stock Exchange and currently has about 90 subsidiaries. After the completion of this transaction, the State-owned Assets Supervision and Administration Commission of Guangzhou Municipality will become the actual controller of the JSTI Group.
The change of the control of JSTI Group in relation to this transaction includes: 1. The transfer of some shares held by the former actual controller of JSTI to Guangzhou Guofa Fund, as a party acting in concert with Zhujiang Industrial; 2. The subscription of 291,421,794 shares of JSTI by Zhujiang Industrial through the Private Placement of Shares of JSTI; 3. The original controller of JSTI gives up part of their voting rights. The total amount of the subscription funds and share transfer price of the private placement for this transaction is about RMB 2.8 billion.
As the special legal counsel for Zhujiang Industrial, JunHe completed the legal due diligence review of JSTI and its subsidiaries under a very tight schedule. JunHe’s team participated in the design of the transaction structure, the commercial negotiation, and the drafting and amendment of the transaction documents. JunHe assisted in the communication with SASAC, the different stock exchanges and the other regulatory authorities and assisted with the antitrust filings of the concentration of undertakings. JunHe’s team delivered to their valued clients high quality and sophisticated legal services.
This acquisition project involved the portfolio arrangements of a listed company such as the non-public offering of shares, a shares transfer by agreement, and the waiver of voting rights. It also involved multiple regulatory fields such as those regarding state-owned assets, securities, and anti-monopoly laws. The project was affected by the epidemic and the schedule was very tight. JunHe’s lawyers completed the legal services in every phase and gained praise from their clients, counterparties, and other intermediaries for their rich experience in the takeover of listed companies and their profound understanding of the relevant operational practices. This is another A-share listed company acquisition completed by JunHe’s Guangzhou office after its recent successful assistance in Hainan Development Holdings’ acquisition of AVIC Sanxin and Aoyuan Kexing, (a subsidiary of Aoyuan Group), in the acquisition of their Jinghan shares.
The lead partner of this project was ZHANG, Ping and the principal managing partners were ZHANG, Ping and ZHANG, Huanyan. The principal managing partner for the notification matter was GONG, Mingfang.