IFLR 1000
The Guide to the World's Leading Financial Law Firms

Herbert Smith continues its dominant presence in mainland China cross-border work, having completed some of the largest deals out of anyone in the market this year. Clients seem happy with the firm's accessibility and ability on capital markets deals. "The partner we worked with, Kevin Roy, was very hands on and from our perspective he provided good guidance to his team," says one.

In one example, Beijing partner Tom Chau and John Moore led the Herbert Smith team in advising joint sponsors, bookrunners and lead managers CICC, Goldman Sachs, Morgan Stanley, Deutsche Bank, JPMorgan, Macquarie and ABCI Securities on the Hong Kong aspects of the $22 billion listing of Agricultural Bank of China A and H shares listing. When the listing went to market in July 2010 it was the largest IPO ever done globally. Chau also represented joint underwriters BNP Paribas, BOC International, ICBC International, UBS, Credit Suisse, HSBC, Bank of America Merrill Lynch and Nomura as joint underwriters in relation to ICBC's issuance of HK$13 billion ($1.7 billion) in H-share rights.

November 2010 brought more work, as Moore and his team represented underwriters Morgan Stanley, CCBI, JPMorgan, BOCI and Deutsche Bank as joint global coordinators of the landmark HK$14 billion Hong Kong Stock Exchange IPO and global Rule 144A/Reg S offering of China Rongsheng Heavy Industries group. Bringing the listing to market required reorganising the Rongsheng group to meet difficult regulatory requirements and its business needs.

The capital markets group also represented Chongqing Rural Commercial Bank in its HK$10.5 billion public offering of H shares and a Rule 144A/Reg S international offering. Chongqing Rural Commercial Bank was the third rural commercial bank established in China at the provincial level, and was the first of the China's provincial banks to go public in Hong Kong. Tom Chau, John Moore, Minchu Wang, Melody Chen and Benjamin Chou formed the team for the issuer.

Herbert Smith has advised major international banks and investment firms on loans to joint ventures, international loans, and project financing across the Asia Pacific region. The Beijing and Shanghai teams work together to form the Greater China practice, which covers banking transactions across the region. The team has particular expertise in TMT, natural resources, energy, and acquisition and project finance.

Herbert Smith continues to have a leading presence in China-related project financing. This past year has seen the firm representing a major Chinese financial institution in a Southeast Asia project financing.

Partners Anna Howell and Hilary Lau also advised Kangean Energy Indonesia (KEI) on its ten year charter, $875 million contract with BW Offshore for a floating production unit (FPU) set to operate on the Terang Sirasun Batur gas fields in Indonesia. The first gas is planned to be extracted in 2012, and the FPI will be used to process gas for the Indonesian market via the East Java Gas Pipeline. BW Offshore is one of the world's leading FSPO contractors, and KEI is a market leading oil and gas producer in East Java.

"Herbert Smith is a heavyweight when it comes to project financing," says a peer. "They're known for their ability to do energy project and their history and knowledge in that sector."

Herbert Smith continues to have a strong China M&A practice, led by Head of Department Simon Meng out of Shanghai. Meng led on a number of influential (and confidential) M&A and joint venture deals in China this year, underscoring the strength of Herbert Smith's M&A practice across diverse sectors.

Meng's team garnered positive feedback from large and mid-sized clients alike. According to one client: "We are deeply satisfied and impressed by the extent of the knowledge of the firm regarding all of the questions raised by the deal: not only did they perfectly master the general regulations and laws of China but they precisely know the history of the project, which is of a great help for us."

Clients also had high praise for China partner Betty Tam: "Our interlocutor is first of all stable," says the client, "this is an important point because we do not have to explain again and again the different situations that occur. Moreover, Tam is always easily accessible and very reactive; I am used to saying that she probably never sleeps or rests because whatever the circumstances we always receive a feedback within 24 hours at the latest. Her answers and explanations are always clear and precise."

Tam led the Herbert Smith team on what may be one of the most unusual M&A transactions this year, advising Johnson Matthey in establishing a joint venture with Hebei Aoxing Pharmaceutical group in Xin Le. Johnson Matthew holds their 49% equity interest in the joint venture through Macfarlane Smith in Hong Kong, while Hebei Aoxing holds a 51% equity interest. The venture will initially produce and vent naxoline hydrochloride in China, with plans to then expand the business into the manufacturing and sale of active pharmaceutical ingredients for neurological and narcotic drugs in China. The deal was particularly atypical in that it may be the first joint venture ever to manufacture and sell narcotics drugs in highly regulated China.

Herbert Smith continues to be a powerhouse for IPO work involving China. The firm's status as a leading project finance and M&A advisor in energy and infrastructure deals has developed relationships that allow the firm to do some of the largest deals around. Clients particularly appreciate the firm's competence and ability to forge longstanding relationships. "In terms of technical and professional ability they are very good," says one client. "They are great advisors for our business. In fact, they have been our company's legal advisor since we went public. We have a great relationship with each other."

Herbert Smith's team has been busy this past year with mega Hong Kong and China-related listings. Partner Tom Chau and John Moore led the Herbert Smith team in advising joint sponsors, bookrunners and lead managers CICC, Goldman Sachs, Morgan Stanley, Deutsche Bank, JPMorgan, Macquarie and ABCI Securities on the Hong Kong aspects of the $22 billion Agricultural Bank of China offering and A and H shares listing. When the listing went to market in July 2010 it was the world's largest ever IPO.

Herbert Smith's team also advised the Federal Reserve Bank of New York in the HK$159 billion ($20.5 billion) AIA Group Hong Kong IPO. AIA is a subsidiary of American International Group (AIG), and the deal offered an important signal to the market after the global financial crisis.

Herbert Smith's debt capital markets team, led by partner Kevin Roy, is strong in convertible bonds issuances and the new Rmb-denominated products.

Clients had special praise for Roy, with one client telling us that, "I think he's a five out of five when it comes to technical skills. He's got a good handle on all the basics for these types of offerings since he's such an experienced lawyer. We ran into difficult issues and he came up with some workable solutions that solved the problem. These are the types of things that only seasoned professionals can come up with. He's also cross product and not just knowledgeable in capital markets work. He's able to extend his knowledge across the board and he gave us a positive perception of Herbert Smith overall. From our perspective he's very hands on, and provides good guidance to his team."

Herbert Smith has advised major international banks and investment firms on loans to joint ventures, international loans, and project financing across the Asia Pacific region. The firm's historical strength in project finance means that much of Herbert Smith's work is related to this sector, although the firm's large capital markets practice means that the team is also competent in supporting clients on pre-IPO financings for Chinese and other energy companies looking to list in Hong Kong. Herbert Smith's Hong Kong, Beijing and Shanghai offices work in conjunction to serve their clients in the Greater China region.

Herbert Smith's confidential banking clients include working with a number of leading Chinese banks on telecom, mining and power projects.

Experience is what sets Herbert Smith's team apart from the competition. Partner Tim Mak has worked in-house with the Hong Kong Securities and Exchange Commission, while partner Mark Johnson heads Herbert Smith's Asian Dispute Resolution Group and brings his deep experience in regulatory, civil, and white-collar crime matters. Among his other capabilities, leading partner Gavin Lewis has two and a half years of in-house experience at UBS under his belt in addition to his dispute resolution record in private practice. Kyle Wombolt also bolsters Herbert Smith's regulatory offerings with his expertise in anti-corruption, fraud, and regulation and trading issues. While Herbert Smith's financial services regulatory team has solid experience that spans both the contentious and non-contentious sides of regulatory issues, it is the firm's stellar regional reputation for its dispute resolution capabilities certainly gives them a unique place in the market.

While financial services regulatory matters are notoriously non-discloseable, one public matter that the team did work on this year was advising the Sponsor on The Prudential's listing on the Hong Kong and Singapore exchanges. The team advised the sole bookrunner in a convertible bond offering by Sound Global, among others, in relation to listings of introduction which by nature garner additional regulatory expectations and challenges.

Herbert Smith's competition/antitrust team has built a strong practice in acting for leading multinationals in Mofcom merger filings. The firm's strong energy and project finance practice leads to some of these leading mandates, but the team also advises a wide range manufacturers in navigating Mofcom issues. Partner Karen Ip leads the firm's Greater China practice from Beijing.

One recent example of Ip's work was in advising China Gas as to whether its HK$408 ($52 million) acquisition of Zhongyu (Zhongyu) Gas was subject to Mofcom merger control filings. Zhongyu Gas' primary business is owning and operating gas supply concessions in a number of Chinese provinces, and the parties in the transaction were in dispute as to whether or not local governments had granted Zhongyu Gas the exclusive right to supply and distribute gas in the various provinces. China gas was able to gain approval in July 2010.

Herbert Smith continues its tradition of a strong Greater China practice with its integrated Hong Kong and China teams. The firm is well known for its relationships with energy and natural resources companies, and these connections provide a good basis for many of the firm's leading mandates. The M&A practice is by no means limited to these sectors, however, as shown by this year's deal list.

Clients praise the firm's expertise, accessibility and client priorities. One client lauds the work of Karen Ip's team on recent acquisition, telling us that "They are very good, and have always been very responsive. In high pressure deal scenarios, where we need something not now but yesterday, they always come through for us. We have access to her all the time, any time. Karen is also very clear and I'm happy to say that there is very little 'lawyer speak' - we always get to the point and what she tells us is in plain English and Cantonese too! I guess in effect I'm a repeat customer." Herbert Smith's team recently advised China Shenhua Energy on its Rmb 8.7 billion ($1.3 billion) acquisition of a number of mining companies and assets from the Shenhua Group. China Shenhua energy is a Hong Kong and Shanghai Listed company whose primary business is China-based coal and power businesses. The Shenhua group is its controlling shareholder.

The strength of Herbert Smith's energy and infrastructure practices has led to many strong (confidential) mandates this year in the private equity sector. The team is especially savvy at advising companies in relation to pre-IPO investments in those sectors, especially when it comes to inbound China private equity.

Clients note that "Herbert Smith's network and expertise is very good both in China and internationally. We were very pleased with their service."

As Herbert Smith continues to move from strength to strength in the Asia and China-related energy and infrastructure space, the practice should continue to gain major private equity instructions in the near future.

Herbert Smith's strong presence in the energy sector helps to support the firm's strong showing in regional project finance. The firm's project finance team can boast expertise in financing projects led by international banks across Southeast Asia, and also in helping Chinese financial institutions invest in outbound project work.

"We are deeply satisfied and impressed by the extent of the knowledge of the firm as regards all questions raised—not only do they perfectly master the general regulations and laws of China but they precisely know the history of the project, which is of a great help for us."

In one of the firm's largest project finance deals this year, partners Anna Howell and Hilary Lau also advised Kangean Energy Indonesia (KEI) on a ten year, $875 million contract with BW Offshore for a floating production unit (FPU) in Indonesia. Kangean Energy plans to extract the first gas in 2012.

Herbert Smith runs its India operations from offices across its international network. The practice group is chaired by Chris Parsons and headed by Nimi Patel. A client recommends: "I think so far the firm's been excellent in terms of knowledge and experience. They've been very good in helping us with local partners."

The firm advised Tata Communications on its $525 million syndicated facility arranged by the RBS, Australia and New Zealand Banking Group, and Standard Chartered Bank.

Former Herbert Smith Tokyo managing partner and M&A specialist Steve Lewis left for London last year, leaving three partners in charge of its corporate practice. Divided into two internal practice groups, projects and energy, and M&A, the firm leverages on its global reputation as one of the best energy firms in the game.

Advising mostly on the international law aspects of high-end outbound M&A deals, clients view the team highly for its foreign practice. A unique feature of the lawyers is that they are dedicated M&A specialists instead of corporate generalists, which its premier clients - including Itochu, Marubeni, NTT DoCoMo and Canon among others - appreciate. Additionally, the team has amassed considerable experience across sectors such as TMT, financial services, oil and gas, mining, infrastructure and other resources- related areas.

A top-tier domestic TMT client says "the team's advice and responses are very quick, precise and comprehensive, being backed on plenty of its past M&A and telecoms experiences. Also, they give adequately manage and control local counsels' work."

James Robinson, a much sought-after junior partner, recently worked with Mitsubishi Electric on its 100% acquisition of German manufacturer Vincotech from a private equity seller in an expedited auction process.

Herbert Smith, known among its competitors as having one of the strongest energy and natural resources practice in Japan, again holds top spot in the rankings table this year. The firm's peers were of the opinion that lynchpin David Clinch's departure to the London office would weaken the Tokyo's office capabilities and leave it "in a state of flux". Clinch, however, continues to make his presence. Along with partner Rebecca Major, who recently joins from the Paris office, and partner Brian Scott in Jakarta, Clinch continues to advise long time client Mitsubishi Corporation, this time on its acquisition of a substantial stake in the Senoro Toili oil and gas field in Indonesia (Donggi-Senoro LNG project). The team was led by James Watson and Major,

"She is excellent," says a client of Major ,who is fast becoming well known in the mining community.

Herbert Smith's ability in the Singaporean capital markets area is assisted by its relationship with Indonesian firm Hisara Bunjamin & Tanjung and strong Indian practice. Peers, however, claim that its decentralised approach means that the firm's Singaporean area is quite small, albeit adept with Southeast Asian matters.

Singapore partners Siddhartha Sivaramakrishnan, as well as Hong Kong-based partner Kevin Roy and Indonesia-based partner David Dawborn, advised underwriters Deutsche Bank and JPMorgan regarding Indonesian property developer Agung Podomoro Land's $250 million IPO.

Herbert Smith bolstered its banking practice with the October 2010 arrival of noted partner Adrian Cheng from the firm's London office. "Adrian Cheng is a really sharp guy," a client notes.

Cheng was the lead partner in advising BNP Paribas and Standard Chartered Bank regarding a $140 million secured acquisition bridge facility, which was created so that Salamander Energy could acquire a 100% interest in the Bualuang field in the Gulf of Thailand.

In another energy-related banking transaction, Cheng acted for BNP Paribas and Commonwealth Bank of Australia as both Singapore and English law counsel in a US $80 million secured borrowing base facility for Coastal Energy Company, which financed its interests in the Phu Horm and Bua Ban gas fields in the Khorat and Songkhla basins off Thailand's shore.

This year Herbert Smith has been involved in several M&A transactions regarding Southeast Asian corporations in the energy and natural resources sector. In a highlight, partner Veronica O'Shea advised Rio Tinto regarding an acquisition in the Sulawesi Nickel Project in Indonesia. Rio Tinto holds a 42.5% interest, while Sherritt International has acquired a controlling 57.5% stake in the project.

Partner Austin Sweeney has also represented Sumitomo in its $110 million acquisition of a multi-jurisdictional oil & gas project machine shop, which has operations in Saudi Arabia, Australia and Southeast Asia.

The arrival of partner Adrian Cheng and senior associate Alex Moray at Herbert Smith has added depth to both the firm's project finance practice, which advises prestigious clients such as China Development Bank, Standard Chartered Bank and BNP Paribas.

Cheng represented BNP Paribas and Commonweath Bank of Australia as lenders in a US $80 million secured borrowing base facility for Coastal Energy Company in connection with its interests in the Phu Horm and Bua Ban gas fields in the Khorat and Songkhla bases offshore Thailand.