ChinaFIG - Defining Special Purpose Vehicle (SPV) for Red Chip IPO Listing - Article 39, Order #10
ChinaFIG consultants provide guidance to organizations on China Investments and China policies related to Initial Public Offerings (IPOs) in the US and Hong Kong (HKSE).
Defining Special Purpose Vehicle (SPV) for Red Chip IPO Listing - Article 39, Order #10
A Special Purpose Vehicle (SPV), with regards to these provisions, is a company held overseas which is directly or indirectly controlled by a Chinese Company/Chinese individual residing in China, for the purpose of an listing shares abroad, of a Chinese Company.
The regulations in Articles 39 to 50, refer to transactions involving the equity interests in the possession of shareholders of Chinese Companies or additional stocks distributed by a Chinese Companies, with consideration in the form of equity interests of a Specialty Purpose Vehicle or additional stocks distributed by the Specialty Purpose Vehicle, in order to list shares abroad.
A Foreign Company which holds an equity stake of a SPV and the foreign company is the actual organization which will be taken public, it is required to be in accordance with the SPV provisions in this sub-section.