17 Oct 2017
Russell McVeagh is marking New Zealand Chinese Language Week with a number of events to raise the profile of the language, business etiquette and culture amongst its staff.
Russell McVeagh CEO Gary McDiarmid says the firm is proud of its work supporting Chinese investors, and events are being held across the week to break down barriers for staff in understanding the opportunities, complexities and challenges of the Chinese market.
Highlights of the firm's work in the Chinese legal space include acting for:
- Beijing Capital Group Company Limited in connection with the acquisition of the largest waste management business in New Zealand, for $950 million;
- Hong Kong SAR-based China Resources in the acquisition of a minority stake in agribusiness Scales Corporation, for approximately $56 million;
- China Resources Enterprise on its acquisition of minority stakes in Scales Corporation, by way of a block trade with Direct Capital, and Comvita, by way of a private placement;
- Kuangchi Science in relation to an investment in New Zealand technology company, Martin Jetpack;
- Avanda Group on land development projects throughout New Zealand;
- Capital Environment Holdings Limited (listed on HKEx) on a US$230 million purchase of a majority share in a major New Zealand business; and
- Fujian Anta Investment Company on the acquisition of three office buildings in Auckland’s CBD.
Significant work in the last year has included:
Offer by Zhejiang Rifa Holding Group to acquire ordinary shares in Airwork
Last year, Russell McVeagh acted on the first public transaction in New Zealand subject to a State Administration of Foreign Exchange (SAFE) of the People’s Republic of China (PRC) condition and one of few takeovers undertaken publicly by a bidder out of PRC - acting for Zhejiang Rifa Holding Group Co. Limited (Rifa) on the partial takeover offer to acquire 75% of ordinary shares in Airwork Holdings Limited, an NZX listed company.
Last week, Rifa Jair Company Limited, a subsidiary of Rifa, launched a full takeover offer for the remainder of the shares in Airwork that it does not already hold. In order to ensure the success of the full takeover offer, lock-up agreements were negotiated and entered into with the remaining major shareholders, under which the shareholders agreed to accept the offer. This will bring Rifa Jair's holding to at least 90%, and enable the compulsory acquisition process under the Takeovers Code to be triggered.
Headquartered in Hangzhou, China, Rifa's core business involves textile machinery and electronic precision machinery, and it also operates a diverse range of businesses, with total assets of US$1.1 billion, generating annual revenue of US$250 million. Rifa operates in seven countries, including China, Australia and Italy, across the high tech manufacturing, general aviation, livestock, equestrian and financial investments sectors. It has grown through a series of acquisitions, completing acquisitions totalling US$160 million since 2013.
In 2014, Rifa established Air Xiya, a general aviation business in PRC. Air Xiya is engaged in agriculture and forestry, air tours, public service and high-end flight services. It is targeting an expansion of its fleet to include 30 helicopters and fixed wing aircraft in the next five years, with accelerated development above this level by engaging in selective cross-border acquisitions, such as the Airwork acquisition.
Primavera Capital and Shanghai Pharma on their takeover of Vitaco Holdings Limited by way of a scheme of arrangement
The firm advised Primavera Capital and Shanghai Pharma on their takeover which had the unanimous support of Vitaco's board, senior management and its shareholder Next Capital. The scheme of arrangement was approved by the shareholders of Vitaco on 30 November 2017, subsequently approved by the Federal Court of Australia on 6 December 2017.
Shanghai Pharma is one of China's leading pharmaceutical groups, whose business activities include pharmaceutical research and development, manufacturing, distribution and retailing, and is listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange. Primavera Capital is a leading Asia-based private equity firm that specialises in China-based investments. Primavera Capital have previously made investments in Alibaba, iResearch, Element Fresh and Cainiao.
Vitaco Holdings Limited is an Australian company, with a number of New Zealand subsidiaries. Vitaco manufactures the bulk of its products at two facilities in Auckland, with the perceived quality of New Zealand and Australian supplements a selling point for international buyers in China, the UK and South America. The company consisted of the vitamins and supplements division, whose brands include Healtheries, Wagner and Nutra-Life, and the support and active nutrition and health food segment, made up of Masashi, Balance, Bodytrim, Healtheries and Abundant Earth Brands.
Russell McVeagh undertook legal due diligence with respect to the New Zealand aspects of Vitaco's operations, prepared an application and successfully sought consent from the Overseas Investment Office to the takeover, and advised on the restructure of the New Zealand subsidiaries.
Acting for the Industrial and Commercial Bank of China (ICBC)
The Finance team acted for ICBC in relation to the re-financing of the Marlborough Wine Estates Group with a NZD 6,100,000 facility loan agreement made available by ICBC. The Marlborough Wine Estates Group produces the O:TU and Music Bay brands. Marlborough Wine Estates Group Limited, the parent company, listed shares on the NXT market on 30 June 2016 and has a current market capitalisation of $73.3 million. The group is based in Auckland and owns and operates vineyards in Awatere Valley, Marlborough. Part of the re-financing involved taking mortgages over the vineyard assets. Russell McVeagh is also assisting ICBC with several property development funding programmes.
Acting for New Hope Nutritionals on its infant formula arrangements with Synlait Milk
New Hope Nutritionals (NHN), based in Chengdu, distributes branded infant formula in the PRC. NHN is a subsidiary of New Hope Group, which has more than 600 subsidiaries in 30 countries, with nearly 70,000 employees and annual revenues of nearly 100 billion yuan, operating within industries from feed production to agriculture technology, food processing, etc. Synlait Milk, which is listed on the NZX, is an innovative dairy processing company based in the heart of Canterbury.
Russell McVeagh acted for NHN in relation to its infant milk powder supply arrangements with Synlait Milk. These arrangements will triple the volume of infant formula currently supplied by Synlait Milk to NHN. The arrangements also underpin applications to register NHN's infant formula brands with the China Food and Drug Administration, as food safety regulations are tightened up in the PRC.