DeHeng Assisted TISCO in Completing a Significant Targeted Capital Reduction Project for Its Sino-Foreign Joint Venture Subsidiary

2025-04-27

Recently, DeHeng, as the special legal advisor, assisted Taiyuan Iron and Steel (Group) Co., Ltd. (“TISCO”), a core enterprise under China Baowu Steel Group, in completing a significant targeted capital reduction project for its holding company, Ningbo Baoxin Stainless Steel Co., Ltd. (“Baoxin”), with a reduction in capital exceeding RMB 800 million.

This project had a tight schedule for a heavy workload, involving the rights and interests of multiple shareholders and complex legal procedures. Baoxin is both a state-owned holding company and a sino-foreign joint venture. The project involved negotiations on transaction documents for the exit of some foreign shareholders through targeted capital reduction, as well as the continuation of the joint venture between other foreign shareholders and TISCO and other Chinese shareholders. It also covered pre-approval issues related to the declaration of concentration of undertakings, as well as procedures related to the assessment, auditing, approval and filing of state-owned assets. Additionally, it addressed organizational form adjustments and transitional arrangements before the expiration of the company’s joint venture term, as well as the design of mechanisms in case the reduction in capital could not be completed before the expiration of the joint venture term, among others.

Mandated by TISCO, the DeHeng team, with Zhang Zhonggang, a partner from the Shanghai office, as the overall project leader, Hu Tie, a partner from the Beijing office, as the person in charge of the declaration of concentration of undertakings, and with primary support from lawyers Nie Bomin, Qu Mingzhu, and Ma Jie, provided full-process legal services for this project.