The A-share listed company, Sinochem International Corporation, recently closed its purchase of Huai’an Junsheng New Energy Science & Technology, marking its venture into the lithium battery industry.
Llinks Law Offices, the legal counsel to Sinochem International, provided legal services for the foregoing transaction, including investment structure demonstration, due diligence, transaction documents drafting, negotiation, and closing matters.
“China continues with its favourable policies for the new energy industry, including the new energy vehicles’ power batteries, to promote and guide the sustained development of the industry,” Selena She, a partner at Llinks in Shanghai, told China Business Law Journal. “In recent years, however, the country sets higher criteria for new energy companies entitled to favorauble industrial policies, e.g., higher criteria for applications for advanced technologies.”
Huai’an New Energy, established in June 2017, has been dedicated to R&D and manufacturing of ternary lithium-ion power batteries of high energy density. Its products can be widely applied to new energy vehicles.
For this transaction, “we paid special attention to the application and approval procedures, qualifications of the acquired company, environmental protection issues, intellectual property issues, and core technical staff during the due diligence”, said Colin Shi, a partner at Llinks in Shanghai.
In terms of transactions documents, “the major challenge lies in how to effectively protect the interests of the investor and maintain the autonomy of the target company through a plan of arrangements on corporate governance, business connection, technology R&D/improvement and incentive of core technical staff, so as to connect the business of the target company with the main businesses and advantageous resources of the investor for a win-win situation”, said She.