CIC's execution teams have had a busy two months. Since September this year, the sovereign wealth fund has invested US$3.7bn in total in three foreign companies – Indonesia's PTBumi Resources, Hong Kong-based Noble Group, and Kazakhstan-based oil & gas corporation JSC KazMunaiGas – as it continues its investment focus on natural resources and commodities sectors.
In its US$939m investment in JSC KazMunaiGa, whose shares are listed on the Kazakhstan Stock Exchange and Global Depositary Receipts are listed on the main market of the London Stock Exchange, CIC sought out Vinson & Elkins for international legal advice for the first time. The firm acted on CIC's purchase of approximately 11% of the global depositary receipts of JSC KazMunaiGas Exploration Production.
Beijing partners Xiao Yong and Paul Deemer, together with London partner Francois Feuillat led the team. Locally, GRATA law firm, based in Central Asia and the Caspian region, acted as Kazakhstan local counsel to CIC.
"It only took one month for the transaction to reach completion. Considering the size of the deal and the fact that it's a Chinese company's overseas M&A, one month is a remarkable short time frame," Xiao said. "The external legal advisors advised on London listing rules, while providing legal support and advice on Kazakhstan rules and regulations. Also, as the target company involves state-owned equity, there were some challenging regulatory issues for us to resolve."
Having serviced the country's top oil & gas companies such as PetroChina, Sinopec, CNOOC and ZhenHua Oil, Vinson & Elkins' expertise in advising PRC companies investing overseas and its experience representing the interests of clients doing business in the former Soviet Union – particularly Kazakhstan – are seen as the main factors in the firm having gained this landmark mandate.
Kazahkstan, where the petroleum industry accounts for roughly 30% of the country's GDP and over half of its export revenues, is no foreign turf to many large PRC oil & gas and mining companies. GRATA is also familiar with the region, having 80 lawyers spread across branches in Kazakhstan, Uzbekistan, Azerbaijan and Kyrgyzstan, and representative offices in Turkmenistan, Tajikistan, London, New York and Istanbul.
The firm has been involved in many PRC companies' investment and projects in central Asia. One of the recent highlights was its representation for the Bank of China and the China Development Bank on the Central Asia-China Gas Pipeline project, which was awarded "Project Finance Deal of the Year" by the 2009 ALB Law Awards.
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