Stepember 22, 2014

Recently, Shanghai Baosteel New Building Materials Science and Technology Co., Ltd. (hereinafter referred to as “Baosteel Materials” or “the company”) , a subsidiary of the Baosteel Group, has just introduced two strategic investors into the company by means of capital increase. Watson & Band, as special legal counsel for Baosteel Materials in strategic investor introduction, provided full-course legal services for the company.

The transaction adopted the means of a public offering in accordance with the law. Finally, the company selected Jianyin UDIC Environmental Protection Equity Investment (Shanghai) Co., Ltd. (hereinafter referred to as “Jianyin UDIC”) and Shanghai Jianke Technology Investment Development Co., Ltd (hereinafter referred to as “Shanghai Jianke”) among many other investors. Jianyin UDIC, as an environmental protection investment fund jointly established by China Construction Bank and Shanghai UDIC Co., Ltd, becomes a shareholder of Baosteel Materials as a financial investor, which will help Baosteel Material further standardize the governance structure, improve the industrial chain and broaden the distribution channels of the company. Baosteel Materials will also build an efficient and new building materials delivery and service platform for Shanghai UDIC. Shanghai Jianke, as an investment plaftform company affiliated to Shanghai Research Institute of Construction Science, will also help Baosteel Materials to further consolidate its leading position in the field of new building materials research and development, enhance the ability of comprehensively utilizing waste resources and develop the ability from comprehensive utilization of metallurgical solid wastes to comprehensive recycling utilization of urban mines. Meanwhile the investment introduction of Baosteel Materials this time is also an active measure of the Baosteel Group to practice the mixed ownership economy that was proposed in the 18th CPC National Congress. The action will be beneficial for expanding state-owned capital and increasing the value and competitiveness of the same. It will also be helpful for promoting mutual improvement of various types of capital ownership.

Watson & Band’s attorneys mainly engaged in pre-investment introduction corporate reorganization, transaction structure design, internal compliance examination of the company, database construction, cooperation with external investors in due diligence, and the drafting and revision of an entire set of legal documents including the investment agreement. They also participated in the negotiations with the investors and provided professional legal advice regarding transaction conditions and withdrawal mechanism, all of which promoted the smooth progress of the transaction.

In addition, according to the requirements of State-owned Assets Supervision and Administration Commission, Watson & Band’s attorneys also presented legal opinions on the plan of restructuring involved in this project, so as to ensure that the transaction is in conformity with the legal provisions on state-owned enterprise restructuring and state-owned assets.
This project is one of the various investment and reformation projects undertook by Watson & Band on behalf of the Baosteel Group and its affiliated companies this year, as well as one of the successful cases in which Watson & Band assisted large state-owned enterprise in carrying out mixed ownership reforms.