Case of Acquisition and Restructuring: Dehui Group’s Acquisition and Restructuring of Chemland Industrial Co., Ltd. and CCS (Shanghai) Functional Films Industry Co, Ltd.

Both Chemland Industrial Co., Ltd and CCS (Shanghai) Functional Films Industry Co, Ltd. were established by one technical expertise, the former is a fine chemicals enterprise specializing in development, manufacture and sales of functional film coatings for coated products; the latter is the only enterprise in China which can manufacture all series backlight module using the optical film products including diffusion film, prism film, micro – permeable membrane, membrane, etc.  The two companies have developed quickly for their advanced technology and popular products; however, they were at the corner of closing due to being involved in many debt disputes for reasons on management and operation. Shanghai Dehui Group is an innovation group on science and technology combining science and technology, industry and finance which owns rich experiences on industry investment and integration.  Therefore, Dehui Group decided to acquire these two companies and increase the capital to conduct overall restructuring and integration to fully give play to their technical advantages.

As the legal consultant of Shanghai Dehui Group, legal team of Chambers Yang has provided full-scale legal services for this acquisition and restructuring.  The legal team addressed several issues to be taken care of during the acquisition and restructuring based upon the all-round legal due diligence on the two companies; in addition, team also analyzed and conducted researches on the advantages and disadvantages of different acquisition and restructuring programs to put forward legal proposals on the possible and potential risk and its prediction, avoidance, reduction and control. Considering the status that part of old investors held the equity of Chemland while part of old investors jointly held the equity of CCS with Chemland, also considering the status that the value of assessment of the two companies were far below their registered capitals and cannot be conducted discounted capital increase, the original equity structure shall be changed as each investor respectively holding the equity of the two companies by the same proportions, thus to realize the independent operation, independent capital operation and further restructuring of the two companies, and to equally protect the interest of each new and old investor, also to specify the investment interest of each party. To this end, we have designed the two-step program of equity transfer and capital increase; and, we have also calculated the price and proportion of equity transfer by mathematical model. The acquisition, capital increase and restructuring program has also resolved many legal issues including affiliate transaction, debt restructuring, supplementation of capital contribution by part of old investors, exit of part of old investors, transfer and pricing of state-owned equity, equity incentive and source of fund, payment and supervision of equity transfer price, arrangement on the offset of equity transfer price against the capital increase.

In addition, we also participated in the business negotiation relating to the transaction and put forward legal proposals on relevant issues; drafted the legal documents relating to the transaction including but not limited to a blanket agreements of framework agreement, investment agreement, equity transfer agreement, capital increase agreement, articles of association, relevant shareholder resolutions, BoD resolutions; reviewed the business documents (including but not limited to loan agreement, mortgage agreement and guarantee agreement) relating to the transaction and put forward legal proposals; reviewed the performance of the preconditions of the transaction and supervised the completion of such transaction.

  • 本站声明:本站所载之法律论文、法律评论、案例、法律咨询等,除非另有注明,著作权人均为站长杨春宝高级律师本人。欢迎其他网站链接,但是,未经书面许可,不得擅自摘编、转载。引用及经许可转载时均应注明作者和出处"法律桥",并链接本站。本站网址:。
  •         本站所有内容(包括法律咨询、法律法规)仅供参考,不构成法律意见,本站不对资料的完整性和时效性负责。您在处理具体法律事务时,请洽询有资质的律师。本站将努力为广大网友提供更好的服务,但不对本站提供的任何免费服务作出正式的承诺。本站所载投稿文章,其言论不代表本站观点,如需使用,请与原作者联系,版权归原作者所有。