Baker McKenzie has advised Chinese toll road operator, Yuexiu Transport Infrastructure Limited ("Yuexiu Transport"), on the spin-off and listing of the Wuhan-Xiaogan Expressway (“Project”) on the Shenzhen Stock Exchange through the establishment of a Real Estate Investment Trust ("REIT") as a closed-ended publicly listed infrastructure securities investment fund.
As a result of the spin-off, Yuexiu Transport's interest in the project company that owns the Project, Hubei Han Xiao Highway Construction and Operations Company Limited (“Project Company”), reduces from 100% to 30%. The REIT holds the Project indirectly through an ABS scheme and the Project Company. The expressway consists of the main line that connects Taoyuan in Wuhan to Yangdian Town in Xiaogan City and the airport north connection line, which runs from Ganxia Bay to the north gate of Wuhan Tianhe Airport.
The Baker McKenzie team was led by M&A Partner Dorothea Koo in Hong Kong and Capital Markets Partner Hang Wang in Beijing. Other team members include Special Counsel Janice Wong and Associate Ray Chan in Hong Kong. In our capacity as Hong Kong legal advisers to Yuexiu Transport, the team was primarily responsible for advising on Hong Kong securities and regulatory issues, communication with Hong Kong regulators and general transaction management.
Commenting on the deal, Dorothea said: "This transaction paves the way for our client to list its high quality assets in the PRC capital market, and also raise capital for investment in the reconstruction and expansion of the client’s mature projects. We are very pleased to have the opportunity to play a role in our client's strategic growth story."
Baker McKenzie has been at the forefront of many ground-breaking REIT transactions in Asia, with the Firm having been involved in almost all significant transactions to date involving Hong Kong-listed REITs, a number of China REITs and many other significant REIT-related deals in Asia Pacific.
Jeremy Ong, head of the Firm's Hong Kong REIT practice, said: "We are proud to have advised Yuexiu Transport on the establishment and listing of their REIT, one of four candidates that form part of the second batch of C-REITs. Having regard to the successful listing of the first batch of C-REITs in June 2021, and recent policy expansions to China’s REIT regime since then, we are encouraged by this continued momentum and the opportunities it present for other managers, originators and investors in C-REITs."