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Recently, National Petroleum and Natural Gas Pipe Network Group Co., Ltd (“PipeChina”) held a signing ceremony for the asset delivery and operation handover of its oil and gas pipeline network. The capital increase agreement and asset transaction agreement it signed with the National Council for Social Security Fund (“SSF”) and other new investors have officially come into effect. SSF’s total investment in this project will reach RMB 50 billion. After the completion of the deal, PipeChina’s registered capital will increase to RMB 500 billion. The market-oriented investment by the SSF, a state-owned investment institution will help PipeChina adjust and improve its capital portfolio, and implement the call of the central government to actively and steadily advance the mixed-ownership reform among SOEs.

The National Council for Social Security Fund is a public institution under the Ministry of Finance. As a fund investment and operation agency, it is responsible for the management and operation of the national social security fund and the entrusted management of the investment and operation of the basic pension fund. PipeChina was formally established on December 9, 2019, with the State-owned Assets Supervision and Administration Commission of the State Council performing the investor responsibilities on behalf of the State Council.

As the legal counsel, the DeHeng team was led by partner Jia Hui, with primary support from partner Yang Chunxia, lawyer Chen Li and intern lawyer Yan Yan. Considering the large amount of equity and capital increase involved, it’s essential but challenging to review the due diligence results on the equity and assets and effectively reflect the results in relevant deal documents. The DeHeng lawyers, with their rich expertise and pragmatic approach, assisted the client to complete relevant transactions of the deal, and won high praise and recognition from the client.