DeHeng Advised Export-Import Bank and Bank of China on Acquisition Financing for Purchase of Majority Stake in Marelli by Highly Group


Export-Import Bank of China, Shanghai Branch, as lead bank, entered into a syndication with Bank of China, Shanghai Branch to advance acquisition financing to the Hong Kong subsidiary of Shanghai Highly (Group) Co., Ltd. for the purchase of a 60% stake in the subsidiary set up by Marelli to spin off and restructure its business of automotive air-conditioning compressor and air-conditioning systems. The deal helps Highly optimize the product structure of its new-energy automotive parts business and accelerate its expansion into "strategic emerging industries." The deal was completed on January 28 2021.

DeHeng advised the bank syndicate. The team was led by banking partner Zhang Xu, with primary support from associate Guo Yun and paralegal Ma Yuanyi. DeHeng's role involved a full range of legal services, including credit due diligence, drafting of loan contracts and guarantee contracts, collecting and sorting of withdrawal documents, and issuance of legal opinions. The underlying acquisition was a complicated structure requiring separation of assets and businesses spanning multiple jurisdictions. Challenges arose in the overseas guarantee arrangements and were tackled by DeHeng's high-quality and efficient legal services.

Highly is a world-leading manufacturer of air-conditioning compressors, currently ranking among the top three in the world. It is a leading R&D and manufacturing company of core auto parts and related products under Shanghai Electric Group. After the delivery of the deal, Highly-Marelli will devote itself to develop, manufacture and sell world-beating automotive air conditioning systems and integrated solutions for the thermal management system for new-energy vehicles. It is expected to grow into the a top tier global manufacturers of heat pump air-conditioning systems for new-energy vehicles by making full use of the synergy of both parent companies.

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