2022.12.15
Hainan Province Transport Investment Holding Co., Ltd. intends to build the Hainan Island Tourism Highway to promote tourism in Hainan. The Hainan Island Tourism Highway is located on the coast of Hainan Island and the main line of the highway would be 1000 km in length. It would run through Haikou, Wenchang, Qionghai, Wanning, Lingshui, Sanya, Ledong, Dongfang, Changjiang, Danzhou, Lingao, Chengmai and other coastal cities and counties and connect nine tourist towns, 37 industrial towns and more than 50 tourist attractions and resorts. Once completed, the highway would facilitate the development of Hainan Province as a complete tourism province. The highway’s design focuses on tourism and traffic and a fifth of the highway will have coastal views. The Hainan Island Tourism Highway is the “No. 1 national coastal scenic road” and is a landmark project in Hainan’s development as an international tourism center.
In 2021, Hainan Jiaotou Huandao Tourism Highway Investment and Development Co., Ltd., which is owned by Hainan Province Transport Investment Holding Co., Ltd., intended to borrow RMB 600,000,000 from HSBC Haikou Branch to support the construction of the Highway. This loan facility was a milestone as it was not only the first road construction fixed asset loan provided by HSBC, but also the first loan provided by HSBC to support the development of a Hainan free trade port project. It was also the first loan arrangement entered into by Hainan Province Transport Investment Holding Co., Ltd. and a foreign bank.
JunHe acted as HSBC’s Chinese legal counsel and conducted legal due diligence on the highway project, reviewed the documents in relation to the infrastructure construction, advised on the conditions for the approval of the grant of the facility and the financing guarantee structure. JunHe’s team drafted the transaction documents, issued Chinese legal opinions and ultimately assisted in satisfying the conditions precedent of the loan.
The project took less than 12 months from the confirmation of commencement to the disbursement of funds. It spanned a wide area and involved complex project documents. JunHe’s rich experience in infrastructure project financing and the high-quality services of the bank’s finance team, efficiently dealt with the qualification and compliance issues involved in the project, despite the tight schedule. JunHe’s team proposed effective solutions based on current highway construction practices in various areas. With JunHe’s assistance, HSBC successfully dealt with the relevant risks and completed the granting of the loan.
The project was led by partner LU, Juyi.
