Corporate restructuring in China
Quite a number of foreign investors have found out that what has been planned on paper does not come to fruition in practice. Often the only solution for problems faced at this point involves a restructuring of the project. Depending on the precise circumstances this may mean a buy-out of the Chinese investor and transformation of the joint venture into a wholly foreign owned enterprise or, the other way round, ie the extraction or exit of the foreign investor from the project. Certainly, such measures are extreme and there may be other possibilities as well. Some projects can be put on the right track by re-negotiating the contract and adjusting the share ratios. To help you find the right way to accomplish a turnaround we will analyse the specific circumstances, the legal and contractual basis and in particular the interests of the concerned parties so as to define a tailored solution and a strategy to achieve it. Certainly, this will also include supporting you in dealings with Chinese authorities whose involvement is likely to be unavoidable.
China Group experience includes:
- first buy-out and transformation of an equity joint venture into a WFOE in 1991
- first exit from an equity joint venture and transformation into a Chinese entity in 1995
- restructuring of JVs in pharmaceutical, chemical, automotive, building material, manufacturing and other sectors
- restructuring of a three parties' equity joint venture where the equity of the Chinese party has been pledged by a Chinese court award (1999).