FM Deal Maker of the Year Awards 2012

DEAL OVERVIEW:

While acting as the issuer’s legal advisor in the transaction, we formulated and completed the restructuring scheme of the issuer’s PRC businesses by using the offshore holding companies to acquire the affiliated PRC businesses for the purpose of facilitating the offshore listing.

The transaction is a major improvement in coal industry since the issuer is a private-sector and integrated coal provider in China in a complexity of mining, processing, transportation and storage capabilities.

The transaction is a typical case at that time under the newly revised rules applying to mineral companies (commonly known as “Chapter 18”), namely the rules regarding the mineral companies as listing applicants which are not yet in commercial production period and are waived from financial standards requirement in listing rules.

The transaction is challenging due to its unique and individual circumstances where the business was not started and the relevant legal titles on most of its assets hadn’t been obtained. Besides, since Chapter 18 was newly revised and was accordingly unclear how it should be implemented, we made various efforts on reconciling the opinions and knowledge among different professional parties, especially the technical consultant and financial accountant.

Hua Dai has over two decades of expertise in the fields of capital market, foreign investment, M&A and he worked as legal advisor in some of the remarkable IPO and M & A transactions in the industry. Sheng Deng and Yue Yin are senior associate. Mr. Deng’s practice is particularly focused on the following areas: corporate law, securities law, intellectual property and M&A. Ms. Yin’s practice is particularly focused on the following areas: corporate law, securities law, and M&A. Mr. Dai’s team has advised a large number of transactions involved in the fields ranging from diverse industry sectors to PE investment covering real properties, coal chemical, education, paper, building construction and decoration, resources and mines, agriculture products, chemical products, urban infrastructure, pharmaceutical etc.

Q Please summarise the transaction

March 23, 2012, Kinetic Mines and Energy Ltd. launched its initial public offering (IPO) for a Hong Kong Stock Exchange main board listing under the code of 1277. The share offering was priced at HKD 1.26 per share and raised HKD 1.1 billion in total. Kinetic Mines and Energy is principally engaged in constructing and developing coal mine and is intended to become a leading private-sector, integrated coal provider in China with mining, processing, transportation and storage capabilities. Jingtian & Gongcheng represented the issuer in the listing. The listing of the issuer is also a typical case under Chapter 18, namely rules regarding the mineral companies as listing applicants which are not yet in commercial production period and are waived from financial standards requirement in listing rules.

While acting as the issuer’s legal advisor in the transaction, we formulated and completed the restructuring scheme of the issuer’s PRC businesses by

Q What was your role within the transaction?

using the offshore holding companies to acquire the affiliated PRC businesses for the purpose of offshore listing.

We conducted PRC legal due diligence on the PRC businesses of the issuer and after assisting to solve the relevant PRC legal issues revealed from the du diligence process, we rendered PRC legal opinions.

Furthermore, we cooperated with, and addressed queries concerning PRC legal matters relevant to the Project raised by the Hong Kong Stock Exchange (HKSE) and the professional parties involved in the transaction, especially the technical consultant and financial accountant.

Q

What were the challenges or difficulties presented?

Under the increasingly difficult PRC legal environment, especially after M & A rules going effect in 2006 which ushered in an era of rigorous scrutiny for proposed overseas listing of PRC entities, it’s first and foremost to adopt a practical and legal structure without risk of being deemed as circumvention of MOFCOM approval requirements under the M&A rules by deliberately designing the transaction. Besides, since the HKSE has been gradually putting more weight on the integrity of property titles, it constitutes a challenge for the issuer applying for listing due to its lack of legal title on most of its assets.

Q

How were the challenges or difficulties overcome?

To eliminate the uncertainty of the application of M&A rules, much effort has been done for us to shortlist the proposed reorganisation scheme and at last focused on the final adoption after taking thorough consideration of the background of the transaction. Through multiple rounds of discussion, elaborating on the enforceability and legality of the acquisition scheme and consulting with the officials of the authorities, the acquisition scheme was approved and completed. To solve the title defective issue, we, liaising with the onshore and offshore working groups, making verification through our resources in hand, designed our own strategies on this. Finally, we explained to and convinced HKSE that the issuer obtained adequate rights to participate actively in the process of the extraction of resources.

Q

What other types of clients or transactions have you been involved with?

Our clients range from heavy and light industry entities to PE investors, and we have been involved with a variety of transaction including IPO, M & A, reorganisation, FDI in the field of real properties, coal chemical, education, paper, building construction and decoration, resources and mines, agriculture products, chemical products, infrastructure, pharmaceutical etc.

Q

What are your thoughts and predictions for 2013 and beyond?

Under the current downturn of the world economy, we believe that opportunities are always accompanied by concomitant challenges and there shall be more opportunities than challenges for the capital market in 2013. The key lies in our initiatives of facing the challenges, finding the opportunities therein and seizing them firmly instead of waiting for the recovery of the economy.

BIOS:

Hua Dai Partner. Mr. Dai has over two decades of expertise in the fields of capital market, foreign investment, M & A, Banking & Financing, security law.

Mr. Dai has worked in Jingtian & Gongcheng since 1999.

Major Work Projects • AviChina Industry & Technology Company Limited HKSE listing (H shares);

• China Railway Construction Corporation Limited listing (A+H shares);

• Beijing Tiantan Biological Products Co. Ltd issuance of A shares;

• China Modern Education Group Limited HKSE listing; • Restructuring and HKSE listing of Renhe Commercial Holdings Co. Ltd;

• Sundart International Holding Limited HKSE listing; • Restructuring and HKSE listing of Powerlong Real Estate Holdings Limited;

• China Modern Education Group Limited HKSE listing; • Onshore investment in PRC of Kenfair International (holdings) Limited;

• Private Equity investment by CS and CRCI in Palm Spring Holdings Limited;

• Private Equity investment by Goldman Sachs China Risun Coking Group;

• Private Equity investment by Macquarie led consortium in Powerlong Real Estate Holdings Limited;

• Private Equity investment by New World and Capital International Inc. in Renhe Commercial Holdings Co. Ltd;

• Establishment of Fullgoal Fund Management Co., Ltd and affiliated fund.

Sheng Deng Senior Associate. Mr. Deng’s practice is particularly focused on the following areas: corporate law, securities law, intellectual property and M&A.

Mr. Deng has worked in Jingtian & Gongcheng since 2007.

Major Work Projects • Kinetic Mines and Energy Limited HKSE listing; • On shore Acquisition by China Risun Coking Group to take over PRC coal and steel project, and the private equity arrangement of Pre-IPO for the group;

• Reorganization and Consolidation of several coal miners in Inner Mongolia Autonomous Region, and private placement of Pre-IPO for the group;

• On shore Acquisition of coal miners in PRC by Hong Kong and China Gas Company Limited;

• Restructuring and HKSE listing of Silver Holdings Limited;

• Sundart International Holding Limited HKSE listing; • On shore Acquisition of real estate properties and education projects in PRC by Rykadan Capital Limited.

Yue Yin Senior Associate. Ms. Yin’s practice is particularly focused on the following areas: corporate law, securities law, and M&A.

Ms. Yin has worked in Jingtian & Gongcheng since 2005.

Major Work Projects • Shanghai Jin Jiang International Hotels (Group) Company Limited HKSE listing (H shares);

• Renhe Commercial Holdings Co. Ltd HKSE listing; • China Modern Education Group Limited HKSE listing; • Sundart International Holding Limited HKSE listing; • Beijing Tiantan Biological Products Co. Ltd issuance of A shares.

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