Hong Kong, 19 May, 2006 – LAWFUEL Press release service – Baker & McKenzie’s REIT team in Hong Kong has further consolidated its leading position in the market by being the lead counsel on the establishment and initial public offering of Champion Real Estate Investment Trust (“Champion REIT”) – the first Hong Kong REIT with exposure to prime grade A office property in the premier Central business district in Hong Kong, whose Hong Kong initial public offering was launched today. We advised the Manager of Champion REIT, Eagle Asset Management (CP) Limited, on all aspects of the deal, and also advised Great Eagle Holdings Limited (the sponsor and principal vendor) on Hong Kong Stock Exchange Listing Rules and other regulatory aspects of the deal.
Champion REIT will initially invest in and own 91.5% of the gross rentable area of Citibank Plaza and substantially all of the parking spaces at Citibank Plaza, valued at approximately HK$22.67 billion as of 28 February, 2006. Champion REIT is looking to raise approximately HK$7.1 billion (based on the maximum offer price) as part of a Hong Kong initial public offering and an international placement. The units of Champion REIT are to be listed on the Main Board of the Hong Kong Stock Exchange and dealings in the units are expected to commence on Wednesday, 24 May, 2006.
The Baker & McKenzie team was led by Milton Cheng, the co-head of the Firm’s Asia Pacific REITs Group, together with corporate/funds partner Jason Ng and property partner Debbie Cheung, with support principally from associates Yeo Jih-Shian, Grace Huang, Priscilla Yu and Rita Tang.
Commenting on the deal, Milton Cheng said, “we are delighted to have been able to continue to grow our track record with the Champion REIT deal, with its unique features as the first prime grade A office REIT as well as the first single-asset REIT in Hong Kong. This deal had its own special challenges, not least of which was the complex interplay between the REIT Code requirements and authorisation process for Champion REIT on the one hand, and the Hong Kong Stock Exchange listing rules spin-off, connected transactions and Very Substantial Disposal implications and process for Great Eagle Holdings Limited on the other hand. As a result, a lot of careful planning and coordination, not to mention intensive effort, was required to ensure that all relevant regulatory requirements and processes were satisfied.”
Jason Ng added, “The Champion REIT offering involves a number of interesting structural features such as distribution waivers and interest rate swaps, some of which are first-of-a-kind in the Hong Kong market. Therefore much work had to be done not only on carefully structuring and documenting such features, but also in working with the regulators, the Manager and the Listing Agent to ensure that there was sufficient and balanced disclosure of these features in the offering circular so as to give investors the necessary information.”
The Baker & McKenzie team acted as legal advisers to the Manager on Hong Kong and US laws and had lead responsibility for legal structuring and documentation, drafting of the offering documentation, regulatory submissions, liaison and clearances with the Securities and Futures Commission and the Hong Kong Stock Exchange, regulatory licensing for Eagle Asset Management as Manager of Champion REIT, property aspects, and general transaction management.
Merrill Lynch is the sole global coordinator and sole listing agent for the deal. Merrill Lynch Far East Limited, Citigroup Global Markets Asia Limited and JP Morgan are the joint lead underwriters. Merrill Lynch Far East Limited and Citigroup Global Markets Asia Limited are the joint financial advisors. HSBC Institutional Trust Services (Asia) Limited is acting as the Trustee.
This deal adds to the market-leading track record of Baker & McKenzie’s Asia-Pacific REITs team, building on its previous successes including advising:
– Hong Kong-listed Guangzhou Investment Company Limited on GZI REIT – the first listed REIT with PRC mainland properties;
– ARA Asset Management on Prosperity REIT – the first private sector listed REIT in Hong Kong;
– CapitaLand on its strategic investment in The Link REIT- the first listed REIT in Hong Kong; and
– Cheung Kong on the Fortune REIT – the first listed REIT involving Hong Kong properties.
Baker & McKenzie is to date the only law firm that has had a principal role on all of the Hong Kong-listed private sector REITs to date – Prosperity REIT, GZI REIT and now Champion REIT. The team has also been very active in other REIT markets around the region including Australia, Japan, Taiwan and Malaysia.