Yangzijiang Shipbuilding Holdings has recently become the first mainland company to list in Taiwan: its sale of Taiwan depositary receipts (TDRs) raised US$141m. The well-received deal bodes well for other PRC companies that may want to tap the investor base on the other side of the Strait for fresh capital.
According to Chen Le, a Llinks Law Offices partner experienced in Taiwan-related legal services, the door is now open and similar deals are likely to follow. “Since the Economic Co-operation Framework Agreement and the Taiwan Stock Exchange’s increasing openness to Chinese companies and investors, there have been more local companies interested in listing on the Taiwan Stock Exchange (TWSE). We expect Yangzijiang’s listing to unleash similar cross-Strait deals,” said Chen.
With closer cross-Strait exchanges, Llinks is expecting to work even more closely with Taiwanese firms. The new sentiment also brings about new competition. “It offers greater opportunities but also brings about greater challenges as more firms will also start to tackle cross-Strait work,” Chen added.
Daniel Lee, counsel at Shanghai-based Leaven Attorneys-at-Law (which is in a strategic alliance with Taiwan’s largest firm, Lee and Li) agrees that more local lawyers will be looking to work on cross-Strait transactions. “The Yangzijiang listing will definitely ignite interest in TDR issuances and local firms who have been dealing with offshore listings will be paying closer attention,” said Lee. He also identifies another trend – Taiwanese corporations operating in China returning to Taiwan to launch their IPOs. In 2010, Leaven advised 10 companies (in the hospitality, technology, food & beverage and real estate sectors) on their TWSE IPOs.
Dacheng and Zhongyin are already active pioneers on this new cross-Strait frontier. In recent years they have both established two branch offices in Fujian province, a key destination for Taiwanese investment. The firms have also entered into strategic alliances with local Taiwan firms. ALB
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