Linklaters advised the joint lead managers on China Hongqiao Group’s US$300m convertible bonds due 2030 and concurrent share repurchase by the company, representing the first ever convertible bond transaction with a concurrent share repurchase for a company with a primary listing on the Hong Kong Stock Exchange (HKEX).
The concurrent share repurchase was part of a sale coordinated by the joint lead managers of existing shares notionally underlying the bonds by buyers of the bonds who wish to sell such shares in covered short sales (the “concurrent equity offering”). The concurrent share repurchase, as part of the overall concurrent equity offering, is expected to facilitate the initial hedges by investors who desire to hedge their investments in the bonds, facilitate better pricing terms in respect of the bonds and mitigate negative share price impact on the shares, thereby greatly enhancing the attractiveness of the convertible bond product to issuers and investors alike. Waivers from both the HKEX and the Securities and Futures Commission of Hong Kong were obtained from strict compliance with certain of the HKEX listing rules and the Codes on Takeovers and Mergers and Share Buy-backs.
The Linklaters team was led by capital markets partner Taiki Ki and corporate partners Roger Cheng and Donnelly Chan, with support from managing associate Cheng Rui Chua.
