Gilbert + Tobin acted as Australian legal counsel to Yancoal on the company’s dual primary listing (HK Listing) today on the Hong Kong Stock Exchange (HKEx) and the associated initial public offering (IPO) of its shares to raise HK$1.605 billion. This is the first dual primary listing of a company on the Australian Stock Exchange (ASX) and HKEx.
Today’s HK Listing and IPO was undertaken in conjunction with a pro-rata accelerated renounceable entitlement offer (AREO) in Australia to existing shareholders, which will complete in early January 2019.
The HK Listing and IPO represents a significant milestone for Yancoal, which first listed on the ASX in 2012 when it acquired ASX-listed Gloucester Coal. The latest transaction follows on from Yancoal’s transformational acquisition of Rio Tinto’s Coal & Allied in 2017, in which G+T Corporate partners Costas Condoleon and Sophie Chen had leading roles advising Yancoal and its directors. The HK Listing and IPO is designed to provide a platform for Yancoal’s future growth, as well as to enhance liquidity of trading in Yancoal shares.
G+T’s leading equity capital markets and Chinese dealmaking expertise, together with its strong working relationships with key Australian regulators, the Foreign Investment Review Board (FIRB), the ASX and the Australian Securities and Investments Commission, was critical to Yancoal’s success in achieving a dual primary listing on the HKEx.
G+T designed the novel structure that facilitated the Hong Kong IPO. The G+T team, led by Corporate partners Costas Condoleon, Sophie Chen and Adam D’Andreti, achieved this through the renunciation by Yancoal’s major shareholders of their entitlements under the AREO – these renounced entitlements represented the Hong Kong IPO.
Given the high percentage of existing ownership of Yancoal by Chinese state-owned enterprises (SOEs) and the high number of institutional investors in Hong Kong that are also SOEs, Yancoal’s ability to execute the Hong Kong IPO depended on finding a way to ensure participating SOEs obtained all necessary FIRB approvals within the short timetable required for the IPO.
G+T worked with FIRB to complete an approval process that gave Yancoal and the Joint Sponsors (Morgan Stanley, China Merchant Bank International and Bank of China International) maximum flexibility to market and allocate shares under the Hong Kong IPO. The G+T team also worked closely together with Yancoal’s Hong Kong counsel, Freshfields, to seamlessly help Yancoal achieve its goals.
Costas Condoleon and Sophie Chen agreed: “This transaction represents another chapter in Yancoal’s transformation into one of Australia’s leading mining companies. G+T is privileged to have assisted Yancoal achieve its dual primary listing on the Hong Kong Stock Exchange. This is a transaction that will bring long-term strategic benefits to the company and involved consideration of a number of complex Australian and Hong Kong regulatory matters.”
G+T Corporate Partner Deborah Johns and Energy + Resources Partner Chris Flynn also played an important role in this deal. The partners were supported by Corporate lawyers Kevin Ko, Lucy Hall, Dimitri Kalis, Michael Tong and Lily Zhang, and Energy + Resources lawyers Anthony Pizzolato, Henry Cornwell and Alena Stirton.
Other Australian firms involved in this transaction included Herbert Smith Freehills (Australia) as Australian legal adviser to the Joint Sponsors and the Underwriters, ShineWing (Australia) as Yancoal’s accounting advisor/auditor and KPMG (Australia) as tax advisors to Yancoal. A number of Hong Kong and Chinese firms were also involved.
Gilbert + Tobin’s market-leading Corporate team has advised on many of Australia’s largest and most innovative transactions, including advising Viva Energy on its $2.65 billion IPO, Beach Energy on its equity capital raising to fund its $1.585 billion acquisition of Lattice Energy, Jacobs on its proposed A$4.6 billion sale of its energy, chemicals and resources group to WorleyParson and Coca-Cola Amatil on its joint acquisition with The Coca-Cola Company of a 45% equity stake in the Made Group.