Recently, 8 investors including China Life Insurance Company Limited (listed on NYSE (Stock Code: LFC), HKSE(Stock code: 02628), SHSE(Stock Code:601628), hereinafter referred as “China Life”), and China Huarong Asset Management Co., Ltd have made 12.6 billion RMB of capital contribution to four wholly-owned subsidiaries of Aluminum Corporation of China Limited(hereinafter referred as “Chalco”) through debt to equity swaps and cash capital increase for Chalco subsidiaries’ debt repayment.This transaction will improve Chalco’s financial condition and structure of assets and liabilities, and represents China Life’s positive response to the central-government policy of Supply-Side Reform, De-leverage, Transition and Upgrade of State-Owned-Enterprises, and Promotion of Real Economy.
Zhong Lun Law Firm acted as the legal counsel to China Life Insurance Company Limited in this transaction. The project team from Zhong Lun was led by Shiwei ZHANG, and included Jian Zhang, Yulin Liu and Tina Zhang.
This project is a leading case of debt to equity swaps in a market-oriented manner under the policy background of Opinions on Positive and Prudent Reduction of Corporate Leverage and Guiding Opinions on Bank Debt to Equity Swaps in a Market-Oriented Manner enacted by the State Council. The project involves non-public company’s cash capital increase for debt repayment, public companies’ assets purchase through issuing shares, securities supervision on two public companies listed in three stock exchanges, and industry supervision on insurance funds’ investments in equity and shares. Zhonglun has a solid grasp on applicable laws and regulations and successfully fulfilled client’s and other relevant parties’ business demands.