(EnergyAsia, January 19 2011, Wednesday) — Hong Kong-listed China Shenhua Energy Company Limited (CSEC) said it has received shareholder approval to acquire the stakes of its parent company and other subsidiaries in 10 mining companies for more than RMB8.7 billion. (US$1.RMB6.6).
 
The companies, which are involved in coal exploration, power generation, trading, information technology and financial services, are mostly based in the Inner Mongolia Autonomous Region and Shaanxi province.

With their acquisitions, CSEC expects to boost its recoverable coal reserves by nearly 21% to 14 billion tons. It will also enable the company to significantly increase coal production over the coming year to help meet China’s rising energy demand. 
 
Among those fully or partly acquired from Shenhua Group and its subsidiaries are Shenbao Company (56.61%), Hudian Company (80%), Clean Coal Company (60.1%), Chaijiagou Mining (95%), Finance Company (59.29%), Material Company (100%), Tianhong Company (100%), Information Company (80%) and Beiyao Company (100%).

International law firm Herbert Smith said it advised CSEC on the transactions, while China International Capital Corporation Hong Kong Securities Limited, Deutsche Bank AG (Hong Kong Branch), China International Capital Corporation Limited and Zhong De Securities Co Ltd provided financial advice.

China Merchants Securities (HK) Co Ltd was the independent financial adviser to the independent board committee and independent shareholders.

DeHeng Law Office acted as China counsel to CSEC, the listed arm of Shenhua Group Company Limited, the country’s biggest coal producer.

Herbert Smith said its team was led by Beijing corporate partner Tom Chau who was assisted by senior associate Victor Pang.

Mr Chau said: “We are pleased to have been involved in this acquisition. The successful close is a further demonstration of our strong competence in M&A transactions. We value our long-standing and strong relationship with Shenhua, which included advising China Shenhua Energy Company Limited on its HK$23 billion initial public offering in 2005.” (US$1=HK$7.78).

Herbert Smith LLP is an international legal practice with 1,400 lawyers, including over 250 partners, and a network of offices in Europe, the Middle East and Asia. The firm has over 400 staff in Asia and 200 lawyers in offices in Bangkok, Beijing, Hong Kong, Shanghai, Singapore, Tokyo and an associated office in Jakarta.