DeHeng Advised on China Life's Eight Billion Yuan
Debt-to-Equity Swap Investment in CPI Nuclear Power
2019-2-19
On December 4, 2018, China Life Asset Management Company Limited (CLAMC) signed a debt-to-equity swap agreement with State Power Investment Corporation (SPIC) to increase its capital in CPI Nuclear Power Co., Ltd. (CPI Nuclear Power), a subsidiary of the SPIC, by eight billion yuan. The move demonstrates China Life's commitment to supporting the economy, and to such government policies as the Opinions of the State Council on Actively and Steadily Lowering the Corporate Leverage Ratio, Guiding Opinions on Market-Oriented Debt-to-Equity Swap, and Guiding Opinions on Supporting the Development of the Real Economy with Insurance Business. The increased capital will help CPI Nuclear Power reduce its debt and leverage ratio, provide strong support for its green innovation development, and boost SPIC's nuclear power business. China Life was commissioned to carry out the agreement, which demonstrates its comprehensive strategic partnership with the SPIC.
CLAMC was the first Chinese insurance and asset management company to join the United Nations-supported Principles for Responsible Investment (UN-PRI) and to practice ESG (Environmental, Social, and Governance) investment. The company pursues long-term value investment and seeks to balance economic, social, and environmental benefits. So far, its debt-to-equity swap partnerships have totaled 58 billion yuan, demonstrating that CLAMC lives up to its goal of serving the real economy with a focus on supply-side structural reform and debt-to-equity swap.
As the legal counsel for this debt-to-equity arrangement, the DeHeng Beijing office formed a team led by partner Huang Huazhen and supported by partner Liu Huanzhi, lawyers Sun Quan and Xu Xiaona, and legal assistants Yuan Yujie and Yuan Zi. The DeHeng team provided professional legal services for the entire project, covering structural design, due diligence, contract negotiation and drafting, revising and issuing legal opinions, and laying a solid legal foundation for the finalization of the agreement. DeHeng will continue to provide comprehensive, premium, and professional legal services for clients at home and abroad.
