Fontainburg


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	Disposal of a Controlling Equity Stake in an EJV

	*Fontainburg Role: Project Coordinator & Financial Advisor*


				Case Background

				Our client was one of the Big Four state-owned banks with various investments throughout China and globally. One of these investments was a controlling interest in an equity joint venture bank which was founded in 1993 in the economically vibrant coastal area of Mainland China and had total assets of more than EUR 120 million.

				Client's Requirements

				Our client wished to divest its controlling stake in this Sino-foreign joint venture bank and in doing so maximize return on investment.

				Approach and Key Issues

				Fontainburg went beyond a traditional search for an investor and worked to develop a strategic plan to maximize the return for our client. Key issues included determining the strategic rationale for the potential buyer and regulatory issues. Managing the risk on the regulatory front was a special challenge as any transaction potentially involved a change in legal status of the equity joint venture bank. As such, close coordination was required with all of the major regulatory bodies including the Ministry of Finance, former ministry of Foreign Trade and Economic Cooperation, the People's Bank of China, and the China Banking Regulatory Commission (CBRC).

				Fontainburg Solutions

				Based on a comprehensive analysis of the regional economy and the status of the developing financial services and banking industries, Fontainburg presented the alternative of a strategic development blueprint to transform the bank into a regional flagship and well-known brand. A four-phase plan was developed which considered factors such as target client groups, business model, management team composition, competitive landscape, and ownership structure. Fontainburg also worked with all of the above-mentioned regulatory bodies to prepare the relevant application materials and ensure successful approval of the transaction. Fontainburg acted as project coordinator and financial advisor and identified potential strategic investors and managed the entire transaction until its successful completion.

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