KWM advises Yancoal Australia on its dual primary listing in Hong Kong

On 6 December 2018, advised by King & Wood Mallesons ("KWM"), Yancoal Australia Limited ("Yancoal ", ASX: YAL), the subsidiary of Yanzhou Coal Mining Company Limited ("Yanzhou Coal", 600188.SH and 01171.HK)  completed its global offering and listing on the Hong Kong Stock Exchange ("HKEX"), becoming dual primary listed on the ASX and the HKEX. The deal further complements Yanzhou Coal's access to capital markets with four places on three stock exchanges globally and also marks Yancoal's third major step forward following its IPO in Australia in 2012 and acquisition of Coal & Allied Industries in 2017. The issue was priced at HK$23.48 per share, raising about HK$1.396 billion (approximately RMB1.234 billion).

Yancoal is an ASX-listed subsidiary of Yanzhou Coal. Yanzhou Coal became dual-listed on the Shanghai Stock Exchange ("SSE") and the HKEX in 1998, issued ADRs on the NYSE (stock code: YZC) and later moved to the OTC market in 2017. The state-owned energy giant has substantial operations in coal, chemicals, equipment manufacturing and financial investment.

Established in 2004, Yancoal has become the largest independent coal producer in Australia since it listed on the ASX in 2012. In 2017, it acquired Coal & Allied Industries from Rio Tinto, boosting its market capitalization close to RMB21.4 billion. Post this global offering in Hong Kong and now dual-listed, its valuation has further increased to approximately RMB27.5 billion. The deal comprises a rights issue and a public offering of new shares. Specifically, Yancoal firstly undertook a 35-for-1 share consolidation before conducting an entitlement offer of shares to existing shareholders. Yanzhou Coal and two other major shareholders of Yancoal renounced their rights under the rights issue in favour of investors in the global offering, making available an aggregate of 59,441,900 Yancoal shares for the public offering. 

Post its Hong Kong listing, Yanzhou Coal has four places on three stock exchanges globally, further enhancing its access to capital markets, brand awareness and global influence in the coal industry. This is expected to significantly benefit its business growth.

Yancoal has successfully finished a gorgeous hop, skip and jump in the capital market. KWM has provided efficient and high-quality legal services for all these three moves. In this offering, as Yanzhou Coal, the controlling shareholder of Yancoal, is an A- and H-share listed company and an important state-owned enterprise, this project involves multiple regulatory lines and sets of rules. As the PRC counsel to Yancoal Hong Kong listing, KWM assisted with the preparation of its listing plan and compliance plans, internal and external approval procedures, the drafting of relevant documents, and the coordination of information disclosure of listed companies. KWM also advised Yancoal on the PRC legal issues during its communication with FIRB (Australian Foreign Investment Review Board) and ATO (Australian Taxation Office), providing strong support for the successful listing.

The project was led by partners Tang Lizi and Han Jie from KWM Beijing office with assistance by senior associates Sun Yong, Guo Liang, Gao Zhao and associates Yu Rui, Cui Tongxin, Zhang Shuo and Zhu Zexin.

Tang Lizi commented, "We are very honoured to have assisted our long-standing client during their on-going upgrade in the capital market. Yancoal, as an important natural resource acquisition platform for Yanzhou Coal, has achieved a dual listing upon completion of this transaction. This strategic step evidences the innovative powers of the far-sighted management in integrating extensive experience and capital resources to support their growth aspiration. With our customer-focused approach, global perspective, professionalism and dedication to excellence, KWM has provided strong support throughout the implementation of the globalisation strategy of Yanzhou Coal. We will also be pleased to leverage our top-quality legal resources worldwide to assist more clients with their capital market transactions."