China Mengniu Dairy Company Limited Announces Issuance of a $194.8 Million Offering of Exchangeable Bonds

May 18, 2017

S&C client China Mengniu Dairy Company Limited, a company listed on the Hong Kong Stock Exchange, entered into a subscription agreement in connection with the issue of $194,800,000 zero coupon exchangeable bonds due 2022. The bonds are exchangeable into initially 689,438,782 ordinary shares (subject to adjustments) of China Modern Dairy Holdings Ltd. (Modern Dairy), which is also a company listed on the Hong Kong Stock Exchange. The bonds will be governed by English law, offered outside of the United States in accordance with Regulation S and listed on the Hong Kong Stock Exchange. Mengniu Dairy intends to use the net proceeds from the bond offering to refinance certain of its existing indebtedness and for general corporate purpose. In connection with the issue of the bonds, Mengniu Dairy entered into a securities lending agreement to provide stock lending of up to 689,438,782 ordinary shares of Modern Dairy, representing approximately 11.24 percent of the issued share capital of Modern Dairy, to the bondholders for the purpose of hedging their investments.
The S&C team advising Mengniu Dairy was led by Gwen Wong and Kay Ian Ng, along with Kung-Wei Liu, Sarah Luo and Jerry Gao. In addition, Vanessa Blackmore, Kirsten Rodger, Andrew Thomson and Emma Hardwick advised on the English law and tax matters.