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KWM’s Hong Kong office doubles up on prime capital markets deals

King & Wood Mallesons has advised on Hong Kong’s largest rights issue to date this year, with investment house Fosun International raising $1.5bn to fund a push into financial services.

A key private equity player in China, Fosun is one of KWM’s biggest clients and returned to the firm for the issue of more than 800 million shares at HK$13.42 each.

A three-partner team at KWM led on the transaction, with the firm’s recent hire from Herbert Smith Freehills, Gary Lock, advising on Hong Kong law, while Beijing-based and New York-qualified Christine Chen handled US law and Richard Mazzochi provided bank financing advice.

Lock said: ‘We are delighted to have been able to support Fosun International on another major capital-raising transaction.’

Fosun, which is backed by Chinese billionaire Guo Guangchang, has increasingly looked to Europe to make investments over the past two years and will use the capital to repay loans and fund investments in the financial services area. The issue follows a push by US private equity houses to pick-up companies and loan books being spun-out of the big banks, with the likes of Blackstone and KKR now operating specialised funds to invest in financial services. 

The Fosun issue is one of two major capital markets mandates handled by KWM recently in Hong Kong, with the firm also advising Mercedes-maker Beijing Automotive Industry Group on a €500m bond issue. State-owned BAIG, which makes Hyundai and Mercedes-branded cars for the Chinese market, made its first-ever euro-denominated bond issue as Chinese firms increase their use of foreign cash pools.

Hong Kong-based partner Hao Zhou led KWM’s advice to BAIG, with support from Mazzochi. Zhou said: ‘We have observed that eurobond offerings by Chinese companies are gathering pace – the total amount of bonds sold in euros so far this year was around seven times more than last year’s total, according to Dealogic data. We are well placed to capture future opportunities given our track record in representing Chinese clients in their offshore bond offerings, strong execution capability and broad China network.’

To read more about KWM, see ‘Sum of its parts: can King & Wood Mallesons match the hype?’