China issues revised rules to boost mergers, acquisitions

The China Securities Regulatory Commission issued the newly revised Administration Measures for Significant Asset Restructuring of Listed Companies on Friday to provide stronger support for mergers and acquisitions involving listed firms.

Originally adopted on March 24, 2008, the measures officially came into effect on May 18 of the same year.

The newly revised measures establish, for the first time, a simplified review procedure. It clarifies that mergers between listed companies, as well as share issuances to purchase assets by high-quality companies (under the condition that the transaction does not constitute a major asset restructuring) --with standardized operations, a market value exceeding 10 billion yuan (about 1.4 billion U.S. dollars), and an A rating for information disclosure quality for two consecutive years -- will be subject to the "2 plus 5 plus 5" review mechanism. This entails acceptance within two working days, completion of the review within five working days, and registration within another five working days.

The measures, for the first time, establish an installment payment mechanism for the consideration of restructured shares. They extend the validity period of registration decisions for transactions involving a one-time registration and phased issuance of shares to purchase assets to 48 months. This innovative installment payment mechanism fully accommodates listed companies' need for flexible transaction arrangements, and is particularly effective in protecting their interests in cases where the valuation of sci-tech enterprises fluctuates significantly.

They also, for the first time, enhance flexibility regarding changes in the financial status of listed companies, horizontal competition, and the regulation of related-party transactions. By aligning with market principles and the needs of industrial development, the reforms effectively lower the institutional costs associated with mergers and acquisitions of listed companies.

"The newly revised regulations significantly streamline the procedures and improve the efficiency of acquisitions, which is conducive to promoting high-quality listed companies in achieving upstream and downstream integration within the same industry as well as cross-industry mergers and acquisitions. This supports their epitaxial growth, enhances the overall quality of listed companies, and boosts long-term stock performance. That means more investment opportunities for the capital market, and a greater sense of gain for investors, which will promote the long-term healthy development of China's capital market," said Dong Ximiao, chief researcher of Merchants Union Consumer Finance Co., Ltd.

China issues revised rules to boost mergers, acquisitions

A total of 115 Czech tourists landed in Sanya, a major city in south China's Hainan province, on Monday aboard a Kazakh flight, the Hainan Free Trade Port's first operational air service under the "seventh-freedom traffic right."

Flight DV481, operated by Kazakhstan's SCAT Airlines, left Sanya Phoenix International Airport on Sunday morning for Prague, the Czech Republic.

The return flight, DV482, arrived in Sanya on Monday, with the Czech passengers entering China smoothly.

"We would like to see this country and visit and enjoy the summer, because we have cold [weather], snow. So, this location will be the best," said a Czech tourist.

"There is a 30-day free-visa [policy] to Hainan for Czech people, so it's nice," said another tourist.

The Seventh-freedom traffic rights allow an airline to carry passengers or cargo solely between two foreign countries without any connection to the airline's home country.

"Sanya is a key city in the development of the Hainan Free Trade Port (FTP). Prague, as a major European tourism and cultural hub, holds significant appeal. We hope the project will be successful, because it will help significantly facilitate the travel between the two countries," said Vladimir Andreevich Sytnik, vice-president of SCAT Airlines.

"The air service is a vivid embodiment of the Belt and Road Initiative. It enhanced the regional connectivity. Launching the air service under the 'seventh-freedom traffic rights' is just an initial effort with further expansion to be planned across China and other parts of the world," said Darkhan Katyshev, deputy chairman of the Civil Aviation Committee at Kazakhstan's Ministry of Transport.

As of now, Sanya has launched a total of 41 international air routes connecting 32 overseas destinations and will continue to roll out more airline services under the "seventh-freedom traffic right" and the "fifth-freedom traffic right."

"The pilot operation of the airline is a key step of the Hainan Free Trade Port (FTP) in building 'two hubs' and in constructing an international aviation and maritime transportation network after the region launched island-wide special customs operations," said Han Luhai, chairman of the Sanya Phoenix International Airport.

The "two hubs" refers to the international shipping hub for the New International Land-Sea Trade Corridor and the aviation hub serving as a regional gateway to the Pacific and Indian oceans.

China on Thursday launched island-wide special customs operations in the Hainan FTP, the world's largest FTP by area, allowing freer entry of overseas goods, expanded zero-tariff coverage and more business-friendly measures.

First flight of international tourists arrive in Hainan under seventh-freedom traffic right