Raising Natural Resources Debt Capital

Debt financing is a popular method of financing in the natural resources industry. Debt financing holds certain advantages over PE investment. It is often viewed as more cost effective than equity finance... More: Raising Natural Resources Debt Capital

Advising investors on mining projects

Typically natural resource companies apply different investment criteria when contemplating investments compared to those applied by non-mining industry PE investors.  In this regard Charltons advises on “Off-Take” arrangements, incorporated and unincorporated joint ventures, and farm-in/farm-out arrangements.  We also advise on EPCM and turn-key contracts and infrastructure access agreements... More:  Advising investors on mining projects

Advising mining companies raising private equity finance in Hong Kong

Early-stage resource companies regularly find themselves in weak negotiating positions due to poor cash flows and lack of a saleable product.  For this reason PE financing may be the only option available to raise the necessary capital to enable them to make the jump from exploration potential to production... More: Advising mining companies raising private equity finance in Hong Kong

Natural resource companies raising private equity finance

There is no universal standard of legal protection for investment in mining. Every project is different. Every project carries its own risks and rewards.  There is no single method to calculate fair valuation. Investors will invariably seek out projects they consider “bankable” whereas miners will seek to retain project control under their own terms and conditions... More: Natural resource companies raising private equity finance

Acquisitions or disposals by Hong Kong listed companies

Under the Hong Kong Stock Exchange Listing Rules ("Listing Rules"), a Hong Kong-listed company may be required to publicly disclose and in some cases obtain shareholder approval for acquisitions or disposals which exceed certain financial thresholds ("notifiable transactions"). In the case of acquisition or disposal of mineral or petroleum assets, a listed mineral company may also need to comply with additional requirements to procure a qualified professional to prepare a report on such assets according to certain recognized standards (a "Competent Person's Report")... More: Acquisitions or disposals by Hong Kong listed companies

HKEx listing decision

HKEx Listing Decision 75-2 involved a change in direct control between two subsidiaries of the municipal government. The decision has implications for the possible use of reverse takeovers to restructure organisations, as so long as the ultimate control of the organisation remains with the same entity, and that entity takes an active controlling role, then the subsidiaries should be free to change their lower level control structure... More: HKEx listing decision

Hong Kong Stock Exchange’s Discretion

The definition of reverse takeover ("RTO") in the Listing Rules gives the Hong Kong Stock Exchange a very wide discretion to determine that a transaction is designed to circumvent the listing requirements and should be treated as an RTO... More: Hong Kong Stock Exchange’s Discretion

RTOs under the Hong Kong Stock Exchange's Listing Rules

The definition of an reverse takeover (“RTO”) is an acquisition or a series of acquisitions by a listed issuer which, in the opinion of the Hong Kong Stock Exchange, constitutes, or is part of a transaction or arrangement or series of transactions or arrangements which constitute: an attempt to achieve a listing of the assets to be acquired; and a means to circumvent the requirements for new applicants set out in Chapter 8 of the HKEx’s Listing Rules... More: RTOs under the Hong Kong Stock Exchange's Listing Rules

Reverse Takeovers

A reverse takeover ("RTO") is broadly defined as an acquisition (or series of acquisitions) of assets by a listed issuer which attempts to achieve a listing of the acquired assets while circumventing the HKEx’s Listing Rules requirements for a new listing applicant... More: Reverse Takeovers

Acquire mining assets from a listed mineral company in Hong Kong

The Hong Kong Code on Takeovers and Mergers ("Code") applies to takeovers and mergers affecting public companies in Hong Kong and companies with a primary listing of their equity securities in Hong Kong. In determining whether a company is a "public company" in Hong Kong, the Securities and Futures Commission ("SFC") applies an economic or commercial test, taking into account, primarily, the number of Hong Kong shareholders and the extent of share trading in Hong Kong... More: Acquire mining assets from a listed mineral company in Hong Kong

Acquisition of producing properties

The review of a producing mine involves a large and multi-disciplinary team. The composition of this technical team will include professionals from geological, mining, metallurgical and environmental disciplines. It will require significant input from the company's legal team to review contracts for all aspects of the mine operation including but not limited to permits, sales or hedging contracts and union and employee contracts... More: Acquisition of producing properties

Acquisition of Exploration Project or Joint Venture Partnership

A discipline review of exploration projects or the acquisition of a joint venture interest involving only a geological team focuses on the identification of exploration potential or "blue sky" of the property or properties being acquired. The review may or may not involve a site visit by the due diligence team. A site visit is recommended if the acquisition is by a public company and will be deemed material by the regulators …More: Acquisition of Exploration Project or Joint Venture Partnership

Mining Due diligence

One of the key challenges in a mining M&A is arriving at a valuation, which is based on current resources and reserves, risks and market conditions, but which at the same time includes an assessment of probable future reserves, anticipated future market conditions, risks and market synergies... More: Mining Due diligence 

Additional information for PRC-listed companies

In the case of an acquisition of or investment in a PRC-listed company, the provisions of the Administrative Measures for Strategic Investments in Listed Companies by Foreign Investors (the "Strategic Investment Rules") will also need to be adhered to. The Strategic Investment Rules regulate strategic investments by foreign investors in PRC companies listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange…… More: Additional information for PRC-listed companies 

Foreign exchange issues regarding acquisitions in the PRC

If the transaction involves a seller who must be paid in China, the foreign purchaser will have to remit the purchase price into the PRC. In such circumstances, the purchase price will typically be remitted to a special account that the seller establishes for the specific purpose of receiving funds of such nature (called a "capital account")... More: Foreign exchange issues regarding acquisitions in the PRC

Documentation, approval process and timing for acquisitions in the PRC

In the case of a direct asset acquisition in the PRC, the main documentation includes: an appropriate asset transfer agreement for the primary transaction; the resolution of the seller of the assets approving the sale of assets; and notification to creditors, or staffing plans... More: Documentation, approval process and timing for acquisitions in the PRC

Governmental approval processes for PRC acquisitions

As an indirect acquisition conducted offshore, PRC authorities generally have no jurisdiction over the transaction and the transaction should not require PRC approval, except for antitrust review procedures… Read More: Governmental approval processes for PRC acquisitions