The Firm represented BOCI Asia Limited, J.P. Morgan Securities Ltd., UBS AG and ABN AMRO Rothschild in connection with the Hong Kong initial public offering and Rule 144A / Regulation S offering of 3,824,900,000 H shares (including full exercise of the over-allotment option) of China Railway Group Limited (“China Railway”), the largest integrated construction group in Asia, the world’s third-largest construction company by contract value in 2006, and a Fortune Global 500 company.
China Railway, a Chinese state-owned enterprise, was the first Chinese company to list its A shares on a mainland stock exchange followed immediately by an offshore initial public offering, in this case of its H shares on the Hong Kong Stock Exchange. The “A-share-then-H-share” dual listing structure, promoted by China’s securities regulatory body for state-owned enterprises seeking a dual listing, enables an issuer to maximize pricing in the offshore IPO as A shares, largely closed to investors outside mainland China, are typically traded at higher prices than prices traded in an offshore exchange. China Railway’s Hong Kong IPO raised approximately HK$22.1 billion (US$2.8 billion) after the full exercise of the over-allotment option. The Hong Kong IPO followed China Railway’s initial public offering of it’s A shares on the Shanghai Stock Exchange just four days earlier, which raised approximately RMB22.4 billion (US$3 billion). The combined US$5.8 billion IPO was the fifth-largest equity offering in 2007 in Greater China.
The Simpson Thacher team for the transaction included Chris Lin, Sally Liao, Blake Dunlap, Yilong Du, Jinghua Zou, Yi Zhang, Ning Liu, Vivien Mao and Frank Chen (Corporate); George Wang, Brijesh Dave and Abram Ellis (OFAC); Wei Cui and Amie Broder (Tax) with paralegal assistance from Lydia Yang.