Maples and Calder, Eversheds and Norton Rose have together helped New World China Land to beef up its financial resources through a rights issuance in Hong Kong.

New World, principally engaged in property development and property related investments, is using the US$683m issuance to build up its land bank in anticipation of a boom in the Chinese real estate market. Its parent company, New World Development, has committed to buy its full entitlement ,69% of the share issue.

Christine Chang, lead partner for Maples and Calder on the transaction, notes a significant shift in the structure of rights issues from previous more traditional models. “We are seeing rights issues underwritten partly by substantial shareholders now, where the banks may be more reticent. The shortening of offer periods to facilitate participation in the issue by institutional investors is also more of a trend. Also, the willingness of the exchanges in the region to come up with measures that decrease the risk involved with the volatility of share prices during the trade suspension periods is something that is now more prevalent,” she said.

Maples and Calder has been Cayman counsel to New World since the company listed in Hong Kong in the 1990s.

The recent activity in the capital markets by domestic property developers has prompted further interests in listings. Since Glorious Property raised US$1.3bn via its IPO in early October, a line of property developers have also subsequently launched their Hong Kong listing plans: Powerlong Real Estate; Beijing-based Longfor Group; Shenzhen-based Excellence Group; and Evergrande.

“We expect more Chinese property IPOs in the pipeline because the global stock markets are showing signs of having stabilised. After a series of difficult deals, sentiments towards Chinese property IPOs seem to be improving. Therefore the PRC real estate developers are rushing to tap the market now, in case bank lending dries up in the event PRC regulators impose any new policies tightening measures for the real estate sector,” said Chang

Advising on major transactions in the capital markets like Evergrande’s US$780m IPO, Maples and Calder is recognised as Offshore Law Firm of the Year at both the ALB Hong Kong Law Awards 2009 and the ALB Japan Law Awards 2009.

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