Latham & Watkins is advising China Galaxy Securities Co on its HK$23.9 billion ($3.1 billion) share sale through a private placement, while Kirkland & Ellis is representing Goldman Sachs, China Galaxy International and Nomura, the joint global coordinators on the transaction.
China Galaxy Securities’ share sale is aimed at boosting its margin finance and securities lending business, the company said in a statement.
Hong Kong corporate partners Dominic Tsun, David Zhang and Mengyu Lu are leading the Kirkland & Ellis team advising the banks.
Chinese stock brokers have been raising funds to meet growing demand for the margin finance business, fuelled by a strong rally in the Hong Kong and mainland share markets. China’s margin finance business, in which investors borrow money to invest in stocks, has grown more than 100 times in just five years to more than $266 billion, according to Chinese government data, and is becoming a profit centre and focus for the industry.
That has propelled the Chinese stock broking industry onto the global stage, with 12 of the top 20 global securities firms by market value belonging to China. China Galaxy had raised $1.1 billion through a Hong Kong initial public offering in 2013.
