國家外匯管理局關(guān)于境內(nèi)居民通過境外特殊目的公司融資(共35頁).ppt

1、Legal Issues in Private Equity and Listings for Chinese Companies Mason Ching, LL.M.PrincipalMason Ching & Associates16 October 2008Speakers ProfileMason Ching is the founder of Mason Ching & Associates. He is qualified to practise in Hong Kong and England & Wales and holds an LLM degree

2、 with distinction in technology and investment laws. His experience is gained in Baker & McKenzie. His expertise is in venture investment, PRC direct investment, fund establishment, securities, listing, takeovers and other corporate finance matters. Convertible Loan Preference Shares lSeries A o

3、r Series B lConvertiblelRedeemablelVotinglPreferenceWarrantsCommon SharesForm of Private Equity InvestmentBoard seatsVeto rights on certain key actionsInformation rightsProfit guarantee and price adjustmentWhen to convertRights of preferred sharesTerms of investmentPre-emptive Right / Right of Parti

4、cipationRight of First RefusalCo-sale / Tag-alongDrag-alongAnti-dilutionDown-side price protection Full Ratchets or Weighed AverageProtective ProvisionsNon-compete covenants from controlling shareholdersPut back option if IPO does not take placeConfidentialityFounders guaranteeFounders provision of

5、security Founders indemnityProtective ProvisionsVendor sale at the time of IPOPlacing after lock-upIssue of derivatives: lwarrants, exchangeable / convertible bond Repurchase by issuerPrivate Placements / Block TradeExit - IPORepurchase by investee companyPut back to founders Trade saleForced trade

6、saleReverse takeoversLiquidationExit Aborted IPOHong Kong Regulatory IssuesListing DecisionslConversion Pricel“toxic convertibles”lLock-upTargetlSOEslPrivate EnterpriseStructure lRed ChiplDirect InvestmentInvesting into ChinaInvestment in legal person sharesValuationApproval processRestrictions on d

7、isposal of promoters sharesPRC Company Law shares issued by a company prior to the public offering of shares shall not be transferred within one year from the Listing DateManagement buy-outsInvestment in H shares Discount on IPO Price Investing into China H Share potentialsPing An Insurance (Group)

8、Company of China Ltd. (2005)Goldman Sachs and Morgan Stanley invested in 1994Dai-Ichi Mutual Life InsuranceHSBC Insurance subscribed for 10% equity interest (legal person shares) in 2002Legal person shares converted into H SharesCase Studies Ping AnRed chip restructuring Relevant PRC LawslNotice of

9、the State Administration of Foreign Exchange on the Relevant Issues Concerning Foreign Exchange Administration of Financing and Returning Home Investment by Domestic Residents through Special-purpose Companies (國家外匯管理局關(guān)于境內(nèi)居民通過境外特殊目的公司融資及返程投資外匯管理有關(guān)問題的通知) issued by The State Administration of Foreign

10、Exchange (SAFE) on 21 November 2005lNotice on Relevant Issues in the Registration of the Offshore Investments of Individual Domestic Residents and Foreign Exchange Registration of Mergers and Acquisitions by Foreign Investors (國家外匯管理局關(guān)于境內(nèi)居民個(gè)人境外投資登記及外資并購?fù)鈪R登記有關(guān)問題的通知) issued by SAFE on 21 April 2005lNo

11、tice on Relevant Issues in Perfecting Foreign Exchange Control in Mergers and Acquisitions by Foreign Investors (關(guān)于完善外資并購?fù)鈪R管理有關(guān)問題的通知) issued by SAFE on 24 January 2005 Private Enterprises (non-H Share Listing) No.75 Notice“Returning home investment” - direct investment activities carried out inside

12、China by residents inside China through a special purpose company:lto acquire or swap the interest of the Chinese party in an enterprise inside China; lto establish a FIE inside China and acquire control of assets inside China through that FIE; Foreign exchange registrationRepatriation and use of fu

13、ndsProvisions of the Ministry of Commerce, State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, Securities Regulatory Commission of China and the State Administration of Foreign Ex

14、change on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (2006Revision)lTook effect on 8 September 2006lApplies to domestic enterprises onlylMOC and CSRC approval required for restructuring and oversea listing of a special purpose vehicle lShare swap allowedlUnwind after 12 mo

15、nths failing listingPrivate Enterprises (non-H Share Listing) Private Enterprises (non-H Share Listing)Notice of the General Affairs Department of the State Administration of Foreign Exchange on Printing and Distributing the Operating Rules for the Notice of the State Administration of Foreign Excha

16、nge on the Relevant Issues about Foreign Exchange Control over the Financing and Return Investment of Domestic Residents through Overseas Special Purpose Companies (No. 106 2007 of the General Affairs Department under the State Administration of Foreign Exchange) (國家外匯管理局綜合司關(guān)于印發(fā)國家外匯管理局關(guān)于境內(nèi)居民通過境外特殊目的

17、公司融資及返程投資外匯管理有關(guān)問題的通知操作規(guī)程的通知(2007修改) 匯綜發(fā)2007106號) 2007-05-29Successful Structure for Red-Chip Original Shareholders do not retain control post-IPOTransfer of AssetsThird party involvementCase Study Solargiga Energy Holdings Limited (Stock Code 757)Mr. TANSECHuaxin SiliconPLCJinzhou Xinri(PRC)Jinzhou

18、Yangguang(PRC)Jinzhou Huari(PRC)Jinzhou Huachang(PRC)74.1%75%25.83%25%70%30%25%75%100%Solargiga After restructuringWWICTIL(BVI)Company(Cayman Islands)SECMr. TANOther Relevant OfficersOther ShareholdersMr. CHONGSolartech(Cayman Islands)BVI CompanyJinzhouXinri(PRC)Jinzhou Huari(PRC)Jinzhou Yangguang(P

19、RC)Jinzhou Huachang(PRC)Jinzhou Youhua (PRC)Shanghai Jingji (PRC)33%100%100%3.12%16.3%8.55%10.61%28.42%100%100%100%100%100%100%100%Case Study Xingfa Aluminium Holdings Limited (Stock Code 98)Messrs. Luo Su, Luo Riming and Liao YuqingXingfa GroupXingfa AluminiumXingfa SGXingfa BVIXingfa Curtin WallOu

20、r CompanyLeahin CoatingXingfa Innovation100%100%100%100%100%100%51%91.3%Case Study JES Singapore Acquisition of assets, liabilities, operations and businessProcessing AgreementRestricted Cash Account AgreementDebt Repayment AgreementFixed Assets Lease AgreementEntrusted Loan AgreementRestricted for

21、Foreign investment lFixed linelTobaccolICP Internet contentslMobile contents mobile phone entertainmentlDigital publication online gameInvesting in Restricted CategoriesSpecial StructurelNeed to consolidate accounts lLoan agreementlOption agreementlEquity pledgelUndertaking / power of attorneylTechn

22、ical service / business agreementlTrade name and copyright licenseInvesting in Restricted CategoriesListing Decision LD 43-3 (2005) Company APRC Subsidiaries Structure ContractsOwning all operating licences to perform the Groups businessRegistered Owners Structure ContractsOwning all intellectual pr

23、opertiesOPCOOutside PRCInside PRC100%100%Direct Investment VehiclelForeign-invested EnterprisesEJV, CJV and WFOElForeign-invested Joint Stock CompaniesRMB FundSet up a WFOEDirect InvestmentConvertible Loan / WarrantsPreference Shares lSeries A or Series B lConvertiblelRedeemablelVotingDirect Investm

24、entRepurchase by issuerPrivate Placements / Block Trade - Measures for Administration of Strategic Investment by Foreign Investors in Listed Companies（外國投資者對上市公司戰(zhàn)略投資管理辦法） 2006-02-01Put back to founders Trade saleForced trade saleReverse takeoversLiquidation - Measures for Liquidation of Enterprise w

25、ith Foreign Investment Direct InvestmentRMB Fund對外貿(mào)易經(jīng)濟(jì)合作部、科學(xué)技術(shù)部、國家工商行政管理總局、國家稅務(wù)總局、外匯管理局令2003年第2號（Promulgated by the Ministry of Foreign Trade and Economic Cooperation， Ministry of Science and Technology， State Administration for Industry and Commerce， State Administration of Taxation and State Admin

26、istration of Foreign Exchange on 30 January 2003 and effective as of 1 March 2003.）RMB Fund Regulationsthe number of investors shall be more than two and less than 50， and there shall be at least one requisite investor as specified in Article 7；the minimum amount of capital contribution a Non-legal

27、Person Venture Investment Enterprise - US$10 milliona Corporate Venture Investment Enterprise - US$5 million. having a clear organizational form；having a clear and legitimate investment direction；at least three professional management personnel with experience in venture investment business； andothe

28、r conditions stipulated by laws and administrative regulations.RMB Fund Regulationhaving venture investment as its main line of business；having cumulative capital under its management of not less than US$100 million in the three years before the application， and at least US$ 50 million of which has been used for venture investment. having at least three professional managem