Pacific Aegis Capital Management’s HK$330 Million Structured Loan Financing To HNA Group

Ashurst and Appleby advised Pacific Aegis Capital Management on the deal.

Pacific Aegis Capital Management acted as arranger on a HK$330 million structured loan financing, backed by a luxury house at the peak in Hong Kong, to a wholly owned subsidiary of HNA Group (International) Company Limited (“HNA”). The majority of the proceeds of this financing were used to refinance HNA’s HK$305 million debt in 2018 and provided additional liquidity to HNA for their business operations.

The transaction was structured in two layers. The underlying funds were contributed by a senior lender, an SPV set up by Hong Kong-based private equity firm Gaw Capital Partners (“Gaw Capital”) and other junior lenders with PACM acting as a co-investor and as the junior agent. A newly established SPV which is jointly owned by PACM and Gaw, Upper Genius Limited, (“UGL”), acted as the immediate lender to HNA. The loan granted to HNA was supported by a security package including a first-ranking mortgage over a luxury house at the peak in Hong Kong and guarantee from HNA.

In order to balance the interests between the senior and junior lenders, the parties have entered into various bespoke agreements to govern the priority amongst themselves. A third party paying agent and common security agent have been engaged to handle payments between the two layers of loans and other administrative work involving securities granted to UGL to ensure neutrality in administration.

The Ashurst team was led by partner Daniel Lau (Picture), supported by Sharon Cong, Hayley Hui, Kristy Tang and Ellie Hung.

The Appleby team included Partner Fiona Chan and Associate Karina Li.

Involved fees earner: Fiona Chan – Appleby; Karina Li – Appleby; Sharon Cong – Ashurst; Hayley Hui – Ashurst; Daniel Lau – Ashurst; Kristy Tang – Ashurst;

Law Firms: Appleby; Ashurst;

Clients: Pacific Aegis Capital Management;

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Author: Michael Patrini