LAWFUEL.com – Legal Newswire
Beijing, 27 February 2009 – Baker & McKenzie recently advised the State Grid Corporation of China (“SGCC”) on (a) its bid, together with two Philippine companies (collectively, the “Consortium”), for a 25-year concession to operate, maintain and expand the nationwide transmission system and electricity grid in the Philippines (the “Concession”), (b) the formation of a Philippine company, National Grid Corporation of the Philippines (“NGCP”), which is the joint venture vehicle for the Consortium and was awarded the Concession for a bid price of US$3.95 billion, (c) the franchise which was granted by the Philippine government in connection with the Concession, (d) its investment in NGCP, and (e) NGCP’s takeover of the operation of the electricity grid of the Philippines. SGCC’s investment arm in Hong Kong, State Grid International Development Limited, holds 40% of the shareholding interest in NGCP, while the remaining 60% interest is held by the other two members of the Consortium.
SGCC is the largest electric power provider and second largest state-owned enterprise in China and currently supplies power to approximately 88% of the territory in China. It is also the largest utility company in the world and ranks 24th on the Fortune Global 500 Largest Corporations list for 2008.
This transaction represents the largest investment made by a Chinese company in the Philippines and the first time that a Chinese utility company will be involved in operating a foreign state-level electricity grid. The Concession is also the largest contract awarded by the Philippine government under its privatization plan to date.
The lead lawyer for this transaction was Stanley Jia, the managing partner of the Beijing office who was assisted by Bee Chun Boo, a partner of the Shanghai office, Pearl Liu, Ramon Quisumbing and Felix Sy, partners of Quisumbing Torres, a member firm of Baker & McKenzie and a team of associates in Beijing, Hong Kong and Manila.
Commenting on the deal, Stanley Jia said, “We are delighted to have acted for SGCC on this landmark transaction and its first foreign investment project in such a large scale. Our involvement in this cross-border transaction demonstrates the Firm’s unique strengths in executing such transactions seamlessly through our global network. Our ability to provide integrated advice and on-the-ground support in Beijing, Hong Kong and Manila, as well as our extensive experience in advising other large Chinese state-owned companies on their global investments were instrumental in the successful completion of this project.”