Awards for Achievement 2009: Day 1

Today we announce the defining deals of 2009 from each country. The deals can be an equity offering, an M&A transaction or a bond. In some cases, we took the opportunity to select a transaction that did not receive one of our major deal awards, but which very much deserved the recognition.

The following deals, the banks that worked on them and their clients will be honoured at an awards dinner at the Conrad Hotel in Hong Kong on February 4. If you would like to book a table at the event, please contact Stephanie Cheung on +852 2122 5225 or [email protected].

Sinopec's $9 billion acquisition of Addax Petroleum
Adviser to Sinopec: Credit Suisse
Adviser to Addax Petroleum: RBC Capital Markets
Legal advisers: Fasken Martineau DuMoulin, Osler Hoskin & Harcourt

This has not been an M&A year and China outbound M&A to secure supplies of natural resources was a trend that started in 2007 and gained significant momentum in 2008. But the $9 billion acquisition by China Petrochemical Corporation (Sinopec Group) of Geneva-based Addax Petroleum Corporation was still a standout deal, both for the buyer and the country. The $9 billion price tag makes it the largest overseas takeover transaction ever made by a Chinese oil company. Addax is an international oil and gas exploration and production company with a strategic focus on West Africa and the Middle East. The deal also captured another trend that gained momentum during the course of 2009 -- if Chinese buyers find their capital unwelcome in some markets, they will look for other markets in which to invest. A number of investment banks cited this as the M&A deal they would have liked to be on. And with fee estimates for what Credit Suisse pocketed running into eight-digit numbers, that's not entirely surprising.

Noble Group's takeover of Gloucester Coal
Adviser to Noble: Citi
Adviser to Gloucester Coal: UBS
Legal advisers: Clayton Utz, Freehills

Early this year, Noble Group, a Hong Kong-headquartered commodities trading company, made an all-cash offer to increase its stake in Gloucester Coal to 100%. Noble's bid was approved by Australia's Foreign Investment Review Board (FIRB), but it was not supported by the directors of Gloucester Coal, who were instead recommending a merger with another Australian miner Whitehaven. Noble's wholly owned subsidiary, Paway, was at the time the largest shareholder of Gloucester Coal with a 21.7% stake. Noble, which is Singapore-listed, first became a shareholder in the company in 2007 when Gloucester Coal received an unsolicited takeover offer from Xstrata. Noble was also Gloucester Coal's largest customer. During the next few weeks Noble employed both financial and legal strategies to emerge the winner for Gloucester at an equity value of A$572 million ($517 million). This is not the first time an Asian company has gone hostile in Australia -- that happened last year when Chinese state-owned enterprise Sinosteel took over Midwest. But it served as a timely reminder that Asian firms have come of age and are ready to play hardball for assets they are keen on.

Larsen & Toubro's $600 million combined QIP and CB
Bookrunners: Citi
Legal advisers: AZB & Partners, Linklaters Allen & Gledhill, Wadia Ghandy

The concept of a combined offering of convertible bonds and equity is not new, but the clever use of it to solve the floor price issue that makes it difficult for many Indian issuers to tap the equity capital markets, caught our attention. By pricing the $200 million CB attractively enough -- the conversion premium was set at just 15% -- to convince investors to also buy the $400 million equity tranche, which because of the floor price had to be priced at an unappealing discount of just 1.1%, Citi was able to complete a qualified institutional placement that the company had been unable to get out the door for some time. The two tranches, which were both launched at fixed terms, were packaged together so that investors had to put in an order for shares equal to twice the amount of CBs they wanted. However, as it happened, the QIP received a number of orders from long-only investors who requested only equity, which enabled the bookrunners to steer the allocation of shares away from CB investors who could have been expected to dump them right back into the market. In recognition of its success, a similarly structured $750 million trade for Tata Motors hit the market the following day.

Reverse takeover of Bukit Makmur Mandiri Utama (Buma) by Delta Dunia and Northstar Pacific Partners, and the $983 million LBO financing package
Arrangers of the $285 million syndicated loan: Barclays Bank
Bookrunners on the $315 million 11.75% bond: Barclays Capital, Deutsche Bank, ING
Bookrunners on the $383 million placement: Bahana Securities, Danareksa Sekuritas, CLSA, Macquarie Capital
Legal advisers: Clifford Chance; Milbank Tweed Hadley & McCloy; O'Melveny & Myers; ABNR; Hadiputranto, Hadinoto & Partners; K&L Gates; Melli Darsa & Co; Susanto & Partners

The sheer complexity of this transaction and the way it secured a smooth (and profitable) exit for Buma's founder and controlling shareholder, Johan Lensa, makes this a worthy winner of our top Indonesia award. It also achieved a near-exit for Delta Dunia's previous owner, while at the same time obtaining a backdoor listing for Indonesia's second-largest coal mining contractor and introducing a new controlling shareholder. The fact that all the different financing legs had to close simultaneously with the acquisition made it even more challenging, as did the requirement that the placement, which was the final piece of the puzzle and saw the controlling shareholder sell 38% of Delta Dunia to mostly high-quality international investors, be hard underwritten. The marketing of the placement had to overcome a declining Indonesian market and uncertainty related to a new mining law, and the bond issue was held up while the loan was being arranged, but in the end it all came together beautifully -- and on time. The bonds and the loan were both done at the Buma level with the money then either on-lent to Delta Dunia or used to pay off existing lenders. The deal was supported by Northstar, an Indonesian private equity firm linked to TPG and GIC, which bought a 40% stake in Delta Dunia, a Jakarta-listed small-scale property company, shortly after it secured the 100% acquisition of Buma.

SK Telecom's $300 million CB
Lead managers: Barclays, Citi, Credit Suisse, Nomura
Legal advisers: Cleary Gottlieb Steen & Hamilton; Davis Polk & Wardwell; Kim & Chang; Yulchon

The $300 million, five-year convertible bond issued by SK Telecom in March was one of the most controversial deals of the year. Nomura joined the lead managers syndicate at the 11th hour, and audaciously proceeded to execute the CB at a tighter pricing than had earlier been discussed, acting largely alone, although other lead managers did get their share of the fees and league table credits. The noise surrounding the transaction at the time -- and subsequently -- was overwhelming. But we still find the deal worthy of an award. SK Telecom met its objectives of raising cost-effective funding to cover the redemption of a CB maturing in May. The pricing, at a fixed conversion premium of 23% over the previous day's close and coupon of 1.75% resulted in a very satisfied client. The deal was the first Asian CB of any scale since September 2008. Bankers told us during pitches there is a "pay to play" characteristic emerging in investment banking in Asia. The SK Telecom CB may not have been the most elegant trade but we think it does characterise something we are likely to see more of going forward -- investment banks that have capital to allocate to deals and are willing to back aggressive terms with the capabilities of their trading desk are likely to wrest business away from competitors.

$3.3 billion IPO of Maxis
Bookrunners: CIMB Investment Bank, Credit Suisse, Goldman Sachs, J.P. Morgan, Nomura International, UBS
Legal Advisers: Clifford Chance; Linklaters Allen & Gledhill; Adnan Sundra & Low; Kadir Andri & Partners; Zul Rafique & Partners

A spinoff from Maxis Communications which was privatised two years earlier, Maxis ticks the right boxes for being awarded top deal in Malaysia this year. Not only was it the largest equity offering in Malaysia ever, it was also the largest ever IPO in Southeast Asia and analysts argue that the deal has the potential to raise the international profile of the entire Malaysian market. The deal was skilfully marketed to stand its ground and attract sufficient investor attention against a large backlog of Chinese IPOs, achieved a significant premium versus regional comps, and traded up 8.4% on the first day. The bookrunners did a good job of positioning the Anand Krishnan-controlled company as a yield play with significant exposure to key indices to make investors see the benefits of buying into a pure domestic telecom operator in a mature market, while the group's high-growth businesses in India and Indonesia reside with Maxis Communications, which will remain unlisted.

Kirin's sale of a 19.9% stake in San Miguel Corporation and acquisition of 43% stake in San Miguel Brewery
Adviser to Kirin: Nomura
Advisers to San Miguel: Royal Bank of Scotland, Standard Chartered

In May, Japanese brewer Kirin completed its purchase of a 43% stake in San Miguel Brewery, the domestic beer business of San Miguel Corporation, paying $1.2 billion for 6.6 billion shares. Kirin then launched a tender offer to minority shareholders and ended up with a 48.3% stake in the brewer. Kirin also secured an exclusivity period to negotiate a potential purchase of shares in San Miguel Corp's overseas beer businesses in China, Vietnam, Indonesia and Thailand. Simultaneously, Kirin sold its 19.9% stake in San Miguel Corp to investment management company Q-Tech Alliance Holdings for $820 million. Kirin had originally bought a 15.5% stake in San Miguel Corp in 2002. Despite the fact that Kirin owned a stake in the parent, San Miguel Corp ran a competitive sell-side for the stake in the brewery and Kirin emerged winner at a valuation analysts commented favourably on. The stake is highly strategic for Kirin, which is seeking to diversify its fortunes beyond Japan.

CapitaMalls Asia's $2.05 billion IPO
Bookrunners: Credit Suisse, DBS, Deutsche Bank, J.P. Morgan
Legal advisers: Allen & Overy; Clifford Chance; Allen & Gledhill; WongPartnership

A spin-off from CapitaLand, CMA was the largest IPO in Singapore ever and was able to achieve premium pricing (versus CapitaLand) and unlock significant value for shareholders of the parent despite a deluge of Chinese property IPOs in Hong Kong at around the same time -- quite a few of which performed poorly in the secondary market. Rather than selling it as a straight-forward developer of shopping malls, the unit was restructured before the IPO to make it an integrated retail real estate business that is unique in Asia and which will not only develop malls, but own and manage them as well. The marketing positioned CMA as a high-growth vehicle by focusing primarily on its value as a proxy for urbanisation, increasing wealth and consumer spending power across Asia. The price was fixed in the lower half of the range, at 1.55 times book value, and at a slight discount to the closest comparable, paving the way for continued buying in the aftermarket and a 25% share price gain in the first two weeks.

Inotera Memories' $312 million GDR
Bookrunners: Credit Suisse
Legal advisers: Linklaters, Lee & Li

This was a critical deal both for Inotera and US semiconductor manufacturer Micron, which became one of the two controlling shareholders of Inotera at the end of 2008. Inotera needed capital to migrate its wafer production to Micron's stack process technology -- a move that is necessary for the Taiwanese company to catch up with the Korean competition. It was not an easy sell though. Inotera's high gearing and repeated breaches of certain loan covenants meant investors needed to get comfortable not only with the outlook for the memory chip industry as a whole, but with Inotera's funding situation, future expansion plans and ability to roll over its debt. While many banks would have been daunted by these odds, Credit Suisse took the management on a one-week roadshow to properly explain the story. Effective marketing basically ensured that the company is now viewed as a promising survivor in the Taiwan DRAM space, while several of its peers are struggling to stay afloat. It also ensured sufficient demand at the maximum 10% discount, despite a 15% share price gain during the marketing. Around 50 investors bought the story and while the over-subscription was minimal, the company was able to add a number of tier-1 global long-only names to its shareholder roster and boost its foreign ownership from less than 5% prior to the deal to close to 20%.

Bangkok Mass Transit System's $353 million bond
Arrangers: Standard Chartered, Bangkok Bank
Legal advisers: Allen & Overy

In August, the Bangkok Mass Transit System (BTS) raised Bt12 billion (at the time $353 million equivalent) through the largest corporate bond issued to date in Thailand by a non-listed company. The bond was multi-tranched, maturing in five tranches annually between 2012 and 2016. The coupon varied based on maturity with the three-year tranche carrying a 4.75% annual interest rate going up to the seven-year tranche bearing a coupon of 6.75%. Covenants were structured to meet the unique requirements of BTS. The bond issue met BTS's objective of raising long-term funding at a fixed cost. It was well-received and the institutional portion was over-subscribed two times. The response was so good that BTS upsized the issue from Bt10 billion originally planned to Bt12 billion. Two-thirds of the bonds were allocated to retail investors and the balance went to wholesale investors. BTS significantly raised its profile in the capital markets through the issue, providing a benchmark for it to raise debt funds in the future and helping with its plans to list through an initial public offering. BTS is A-rated and the deal is also expected to act as a benchmark for future A-rated and infrastructure debt deals by Thai issuers.

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