Selected deal experience
HNA / CWT acquisition — Practice Note 21 due diligence
Planned and carried out interview-led Practice Note 21 due diligence for HNA Holding Group's acquisition of CWT, including management, customer and supplier interviews across the target group.
- Geography
- Hong Kong, Singapore and Switzerland
- Employer
- Oriental Patron Asia Limited
- My role
- Planned the due-diligence work programme and conducted management, customer and supplier interviews, including travelling to Zug to interview MRI management in person.
Context
HNA Holding Group Co. Limited (Hong Kong stock code: 521) proposed to acquire CWT Limited through a pre-conditional voluntary general offer by its wholly owned Singapore subsidiary, HNA Belt and Road Investments (Singapore) Pte. Ltd. The offer price was S$2.33 in cash for each CWT share. Based on the shares then in issue, the maximum consideration stated in HNA Holding’s circular was approximately S$1.399 billion, equivalent at the circular’s exchange rate to approximately HK$7.693 billion.
CWT was a Singapore-listed group operating in more than 90 countries. Its businesses covered logistics services, commodity marketing, engineering services and financial services. The commodity-marketing segment included MRI Trading AG, a Swiss subsidiary engaged in physical trading and supply-chain management for base-metal non-ferrous concentrates and energy products.
The Hong Kong Listing Committee treated the transaction as an extreme very substantial acquisition that did not constitute a reverse takeover. The resulting disclosure standard was comparable to that applied to a new-listing document. As a result, Oriental Patron Asia Limited was appointed as the financial adviser to conduct due diligence on CWT in accordance with Practice Note 21 to the Hong Kong Listing Rules.
My contribution
I worked on the Oriental Patron deal team. Oriental Patron held the formal financial-adviser mandate; my responsibility was a substantial part of the planning and interview work supporting the Practice Note 21 review.
My work included:
- Due-diligence planning: I developed the due-diligence plan and work programme for the Practice Note 21 process.
- Management interviews: I conducted a substantial number of interviews with management across the target group.
- Customer and supplier interviews: I called and interviewed many customers and suppliers to support the review of CWT’s operations and commercial relationships.
- MRI work in Switzerland: I travelled to Zug and interviewed MRI management in person, covering the commodity-marketing business within the wider target group.
Transaction outcome
The PN21 work supported the enhanced transaction disclosure in HNA Holding’s circular dated 30 June 2017. The acquisition subsequently proceeded, and HNA Holding announced that its offeror had become CWT’s controlling shareholder on 29 September 2017, with the offeror and its concert parties holding approximately 80.87% of CWT’s issued shares.