Posted on December 14, 2010 at 5:12 PM
Paul Hastings' Hong Kong Chair, Neil Torpey, explains that despite a four-month period from March to July, where Hong Kong IPO markets had lagged due to the European liquidity crisis, the last several weeks have shown a significant growth in the US market. This growth ushers in greater interest amongst investors towards new and upcoming offerings in the Hong Kong market. In fact, Paul Hastings has hired 20 new lawyers in the past 12 months to cope with an influx of capital markets and finance work, including approximately 25 Hong Kong IPOs.
Torpey remarks that, "There is a tremendous amount of activity in that space right now. What has changed in the last several weeks is while we've been very busy on a number of these deals, now the deals are beginning to come to market and go to the finish line." Examples of this growth can be seen in Paul Hastings' latest activity, having recently assisted Chengfeng Axel, a leading Chinese auto parts manufacturer, in completing a Hong Kong public and international offering under Regulation S/Rule 144A. According to Raymond Li, Paul Hastings' Chair of Greater China Practice, this is the first in a series of upcoming IPOs that Hastings' capital markets team expect to complete.
The 40% jump in Hong Kong IPO activity this year has spurred other firms to accommodate the demand, including Orrick, Maples and Calder, and DLA Piper. Orrick has assisted Boshiwa, high-end children's product manufacturer, and Trony Solar, a Shenzhen-based solar power photovoltaic module manufacturer, with their IPOs. The former has listed its US$320m IPO on KSE's main board, while the latter has issued a US$223m HK IPO. Representing China Medical Systems Holdings, Microport Scientific Corporation (US$213), and Besunyen Holdings as BVI & Cayman counsel, Maples and Calder has recently completed three IPOs on the HKSE. While DLA Piper has worked with Xinjiang Goldwind Science & Technology Co Ltd(Goldwind), a leading wind turbine manufacturer, concerning its IPO valued over HK$7.1 billion (US$915).
According to Mel Immergut, the "Hong Kong expansion is in direct response to the surge in capital markets and MAactivity". Milbank has also been expanding their IPO involvement in reaction to the listings boom, recently adding Mallesons Stephen Jacques partner Dieter Yih to their US partnership and as head of their upcoming Hong Kong partnership. Yih has been involved in Milbank's current US$651m IPO listing of Mongolian Mining on the HKSE.
It is not surprising that the greatest need we have seen coming out of China is for capital markets attorneys with either US and/or HK experience. We currently have needs for both associates and partners in Hong Kong and onshore at all levels and Mandarin fluency is highly preferred.
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