Share issue reveals complexity of “one country, two systems”

PowerlinesA share transaction involving Datang International Power Generation has revealed the complexity of deals spanning both Hong Kong and mainland China. The energy company completed a non-public issuance of China-listed A-shares to its shareholder, China Datang, and a non-public issuance of H-shares, listed in Hong Kong, to a wholly owned subsidiary, CDC, for a combined value of about 13 billion renminbi ($2.1 billion). “The transaction was highly complicated and involved many novel and difficult issues under the Hong Kong Takeovers Code and Hong Kong Listing Rules due to the differences in regulatory requirements between the People's Republic of China and Hong Kong faced by Datang Power in view of its multiple jurisdictions listing status,” said a statement from Eversheds Sutherland, the law firm that advised on the transaction. Datang Power is one of a few Chinese companies to be triple-listed – in Hong Kong, Shanghai and London. It is one of the largest state-owned power producers in the country. Eversheds Sutherland said the transaction was the first completed non-public issuance of A-shares and H-shares involving a whitewash waiver in Hong Kong. ©2018 funds global asia

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