Dacheng Support Junxin Times Square M&A Transaction

Project Introduction

Junxin Times Square is located at No. 1677 Kongjiang Road, Yangpu District, Shanghai, with a land area of nearly 15,000 square meters and a total construction area of more than 70,000 square meters. The above-ground building consists of a 5-storey shopping mall and a 6-23-storey class-A office tower. The shares of the project company are jointly held by Shanghai municipal state-owned enterprises and Yangpu district state-owned enterprises. In November 2023, the shareholders of the project company officially list the project on the SEHK for the transfer of equity and debt, and Shanghai Shengxin Investment Management Co., Ltd. participated in the bidding and delisting. Now the transferor and the transferee have obtained the certificate of property right transaction and completed the settlement on December 21, 2023 at a transaction price of more than RMB1.3 billion.

Led by the transferor Shanghai Industrial Zone Development Corporation (Co., Ltd.), the transferor has entrusted the Wu Chenyao legal team in Dacheng Shanghai office to provide legal services for the transfer of the Junxin Times Square project since 2021. During this period, the project took three years to finally strike the deal due to changes in the intended transferees. Wu Chenyao and his team provided full-process legal services for the project, which covered contact and negotiation with the intended transferees, design of the transaction structure, communication with the SEHK, design of listing documents, review and revision of transaction documents, and credit investigation of the intended transferees, etc.

Project Characteristics and Difficulties

This project is the only comprehensive block M&A transaction concluded in Shanghai inner ring in 2023. Under the background that the block trading market has cooled in the post-epidemic era and investors are relatively cautious, this project injects a shot in the arm to promote the recovery of the market. In addition, this project is also an important practice for the urban area of Shanghai to join hands to thoroughly implement the central government's high-quality promotion of the optimization of the layout and structural adjustment of the state-owned economy. Focusing on the "Five Strengths" goal of enhancing competitiveness, innovation, control, influence and risk resistance, Wu Chenyao's team, through unremitting efforts, ultimately assisted the transferor in completing the orderly exit and high-quality transformation of state-owned assets, and achieving the optimization of asset allocation and maintenance and appreciation of state-owned assets.

This project involves many difficult issues such as the difference between the transferor's income distribution ratio and shareholding ratio, the simultaneous listing of equity and debt, the installment payment of the transaction price and guarantee, and the retrenchment of tenants. Based on superb expertise and rich industry practice, the Wu Chenyao team plays an active role in the transaction and assists the parties to complete the design of transaction structure. On the premise of meeting compliance requirements, the Wu Chenyao team can fully satisfy clients' transaction requests, prevent transaction risks, and help all transaction parties to achieve win-win situation through transactions and cooperation.

The project client, Shanghai Industrial Zone Development Corporation (Co., Ltd.), was established with the approval of Shanghai Municipal People's Government in 1986, and was originally commissioned by The Shanghai Municipal People's Government to undertake the development and construction task of ningbo City. Since 2000, the Corp. of Industry Development has been actively promoting scientific and technological innovation and industrial development, guiding urban renewal and regional transformation, and building many city-type industrial zones and industrial parks with local characteristics in Putuo, Yangpu and other areas. CAIT is affiliated to Lingang Group. As the registered lawyers of Lingang Group for many years, Mr. Wu and his team have been providing comprehensive legal services to CAIT since 2018 and have been serving CAIT for more than six years. The parties have had deep cooperation on the transfer of the entire property assets of Caohejing Shengyuan Project, the transfer of the property assets of Palm Square Project and the comprehensive development and operation of Taopu Zhi Chuangcheng Project. Mr. Wu and his team won high recognition from the clients for their serious, rigorous and practical attitude and professional and efficient service, and the quality of service was praised by the clients.