Access to Capital

We leverage our deep relationships with global investors to provide corporates access to liquidity.

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China’s One Belt One Road (OBOR) offers substantial opportunities to connect Asia

by Kathy Liu, MD, Head of One Belt One Road, CLSA

President Xi Jinping’s One Belt One Road (OBOR) initiative aims to increase trade flows between China and the world with a coordinated infrastructure spending programme spanning 65 countries. To date, China has established 56 economic cooperation zones (ECZs) with more than 20 nations and 10 newly signed free trade agreements, with more in the pipeline. Economic data indicates that intra-Asia trade volume is a key growth driver.  China’s Overseas Direct Investment (ODI) in the form of cross-border M&A, joint ventures and green field investments jumped to US$170bn in 2016, up 89% from US$90bn in 2013. China’s ODI exceeded foreign direct investment (US$126bn) in 2016 and should continue to outpace it.

For the past 20 years, CITIC CLSA’s corporate finance and capital markets business has been involved in over 850 capital market transactions, assisting our corporate clients in fund raising.  Under the OBOR banner, CITIC CLSA has completed capital raises and advisory work for corporates and sovereigns in India, Sri Lanka, Vietnam, Malaysia, Indonesia, Thailand, Philippines, Singapore and Australia, in addition to those based in HK/China.

With China’s outbound expansion still at the midway point of its upcycle in terms of solidifying relationships with OBOR peers, we see many opportunities, especially for construction and equipment companies, to benefit from bilateral agreements through infrastructure collaboration.  Increasingly, we find Chinese buyers focusing on specific assets and businesses that have real strategic value, especially where a brand, technology or product capability can be taken back to China and used to drive stronger growth or improve competitive positioning.

CITIC CLSA’s corporate finance and capital team is uniquely positioned to provide both cross-border advisory services and international capital raising for our OBOR clients. CITIC CLSA has established strong relationships with leading conglomerates, investors, regulatory bodies and other financial institutions in many OBOR countries including Singapore, Malaysia, Philippines, Indonesia, Thailand, India and Sri Lanka.

Click here to learn more about OBOR.

Creating Value

We are focused on long term value creation.

Our priority is to ensure sustainable and long term value creation for our clients. For more than two decades we have advised companies, governments, insurers and investors seeking access to capital markets, restructuring and pursuing strategic investment opportunities. We have worked on numerous, significant capital raising and M&A deals across Asia, helping companies to reach their strategic goals.

3SBio Inc.

When a leading biotechnology company in China decided to IPO, they turned to CITIC CLSA Securities to help them fulfil their capital raising requirements. Working closely with the management team of 3SBio, we assessed the company’s capital requirements based on their long-term growth strategy and more immediate financing needs.

A decision was made to seek corner stone investors for 25% of the shares on offer. CITIC CLSA Capital scheduled a seven-day roadshow in Hong Kong, Singapore, London, Boston and New York to introduce 3SBio to global investors. The share offering attracted considerable attention from institutional investors, corporates and high net worth investors. The International tranche was significantly over-subscribed and the Initial Public Offer in Hong Kong was over 200x oversubscribed, pricing at the high-end of the range.

Details: IPO of 3SBio Inc. (1530.HK) listed on the Main Board of The Stock Exchange of Hong Kong Limited on 11 June, 2015

Deal Size: US$711.6 million (~HK$5,515.5 million, pre-shoe)

Role: Joint Sponsor, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager

Indiabulls Housing Finance Limited

We assisted one of India’s leading housing finance companies to raise US$600 million. Through our help, Indiabulls Housing successfully raised funds in order to maintain its strong capital adequacy ratio as well as for general corporate purposes.

The issue was priced at INR 702 per Equity Share and saw strong demand from high quality funds across the US, Asia-Pacific, and UK. Consisting predominantly of Long Only funds, the book was covered over 1.5x at the base size.

Details: QIP Issue for Indiabulls Housing Finance Limited in September 2015

Deal Size: US$600 million raised through a primary issuance of 56.9 million equity shares at INR 702 per equity share

Role: Global Coordinator and Bookrunner

China

Unparalleled access to China.

With significant presence and local connections in China, our parent company CITIC Securities provides local background, innate knowledge of China’s regulatory framework and comprehensive understanding of developments within all major industries across the country.

As the international arm of CITIC Securities’ global investment banking business, CLSA Securities leverages the breadth and deep relationships of 1,000+ bankers at China’s largest investment bank and is the ideal partner for Chinese companies aspiring to invest overseas, as well as foreign companies seeking Chinese capital for growth and expansion.

China, being one of the fastest-growing markets globally, continues to develop its domestic market, upgrade infrastructure and revive transcontinental trading routes via its Belt and Road initiative. CLSA Securities is best placed to capture the mass of capital inflows and outflows from China.

Deals

CLSA is a market leader in equity and debt capital markets and has completed a number of significant ECM, DCM and M&A deals across the region:

RECENT TRANSACTIONS

Equity Capital Markets

HDFC Standard Life Insurance Company Ltd: USD1.34 billion IPO (2017), the largest ever IPO by a life insurance company in India; CLSA acted as global coordinator and bookrunning lead manager.

SEA Ltd: USD989 million ADS offer (2017) for this Singaporean e-commerce company listed in the US that counts Tencent as a major shareholder. SEA Ltd offered 58,960,000 ADSs at US$15/share in the offering. CLSA acted as co-manager.

YES Bank Ltd: USD750 million QIP issue (2017) for the 6th largest private sector bank in India; CLSA acted as lead global coordinator and bookrunner.

Zhongyuan Bank Co., Ltd.: USD1 billion Hong Kong IPO (2017) for the only city commercial bank directly administered by the provincial government in Henan Province. CLSA acted as joint sponsor, joint global coordinator, joint bookrunner and joint lead manager.

China Yuhua Education Corporation Ltd: USD228 million Hong Kong IPO (2017) for the largest provider of private education from kindergarten to university in China by student enrolments in the 2015/2016 school year. CLSA acted as sole sponsor and joint global coordinator, joint bookrunner and joint lead manager.

Debt capital markets

Postal Savings Bank of China Co., Ltd.: USD 7.25Billion perpetual offshore preference shares offering (2017) for this leading large retail bank in China, the largest ever AT1 offering in Asian debt market, the largest single tranche outstanding USD bond in the Asia market, and the second largest Reg S Chinese USD bond issuance. CLSA acted as joint bookrunner and joint lead manager.

The Democratic Socialist Republic of Sri Lanka: USD1.5 billion jumbo bond (2017) with a coupon of 6.20% due in 20 years. CLSA acted as joint bookrunner and joint lead manager.

CITIC Ltd: USD1.25 billion jumbo bond (2017) for one of the largest multi-industry conglomerates worldwide. The 5-year USD 500 million and 10-year USD 750 million due-tranche deal was successfully priced with a coupon of 3.125% and 3.875%, respectively. CLSA acted as the joint global coordinator, joint bookrunner and joint lead manager.

Equity-linked transactions

China Shipbuilding Industry Corporation: US$1 billion exchangeable bond (2018) for this SOE and one of China’s largest shipbuilding groups. CLSA acted as joint global coordinator and joint bookrunner in this transaction which represents CLSA’s debut JGC role in Asian equity-linked securities.

China Yangtze Power Co., Ltd: USD522 million exchangeable bond (2016) for this subsidiary of China’s largest power group. This was the first dual currency equity-linked issuance by a Chinese company and the first Euro denominated issuance of convertible or exchangeable bonds by a Chinese company. CLSA acted as a joint bookrunner and joint lead manager.

M&A

McDonald’s China Management Ltd: The USD2.08 billion acquisition by CITIC Limited, CITIC Capital China Partners III, L.P. and Carlyle Asia Partners IV,. L.P.’s of McDonald’s mainland China and Hong Kong businesses was completed on 31 July 2017. Upon completion, McDonald’s China was 52% owned by CITIC and CITIC Capital, 28% owned by Carlyle and 20% owned by Golden Arches Investments Limited, a subsidiary of McDonald’s Corporation. CLSA acted as the buy-side financial advisor to CITIC.

PRP Diagnostic Imaging: USD379.4 billion sale of Australia’s largest privately owned radiology group to Shenzhen listed Hengkang Medical. CLSA acted as the sell-side financial advisor to PRP Diagnostic Imaging.