The Lexpert Special Editions profiles selected Lexpert-ranked lawyers whose focus is in Corporate, Infrastructure, Energy and Litigation law and relevant practices. It also includes feature articles on legal aspects of Canadian business issues.
Issue link: https://digital.carswellmedia.com/i/133445
18 FOREIGN INVESTMENT "I NEVER HAD A PROBLEM UNDER THE OLD GUIDELINES IDENTIFYING WHETHER AN INVESTOR IS AN SOE OR NOT. BUT ADDING THE CONCEPT OF INFLUENCE, ON TOP OF THE FACT THERE IS A DIFFERENT THRESHOLD FOR SOES, THAT'S PROBLEMATIC." "I never had a problem under the old guidelines identifying whether an investor is an SOE or not," says Jason Gudofsky, a partner at Blake, Cassels & Graydon LLP. "But adding the concept of influence, on top of the fact there is a different threshold for SOEs, that's problematic. "It's no longer just a question of what undertakings I have to provide, now it's also a question of whether I have to go to the government before closing to get an approval." While the new guidelines do not lay out a checklist for proving a lack of influence, Gudofsky says there are ways to do so. Investment Canada could look at things like whether there have been any appointments by the foreign government to the company's board, what reporting the company provides to its government, whether the government holds a stake and whether it has the right to vote on or veto any decisions. "That may mean investors putting in firewalls to delink the degree of influence that the foreign government has," Gudofsky says. There is concern that the new requirements, coupled with the new limits, may dampen interest by foreign governments with an appetite for oil and deep pockets to fund foreign acquisitions — which could, in turn, dampen valuations. Donald Greenfield, QC, co-leader of the energy practice at Bennett Jones LLP in Calgary, says they already have. "Oil sands companies opened lower the day after the new guidelines were announced so they've already had an impact. And I expect they will continue to have one because they take a bit of a take-over premium out of the market." Greenfield was in China at the start of the year visiting investment banks, law firms and clients in both Hong Kong and Beijing, and says the most common reaction was "moderate concern for what this means for them. "People focused on comments the prime minister made about the Nexen sale not being the beginning of a trend, but rather the end of a trend. They seemed to hone in on that in particular, and some were definitely concerned." But Edmond Luke, who heads the China practice at Fasken Martineau DuMoulin LLP, says he'd be very surprised if at the end of the day it kills off interest — at least when it comes to China. Of all foreign governments around the world, he says, China is probably the best-equipped to understand foreign-investment regulation. g a C n sa m as o in in fo fo gr b yo d se yo is th ea o is S LEXPERT® RANKED LAWYERS RANKED LAWYERS Greenfield, QC, Donald E. Gropper, QC, Mitchell H. Bennett Jones LLP (403) 298-3248 greenfieldd@ bennettjones.com Farris, Vaughan, Wills & Murphy LLP (604) 661-9322 mgropper@farris.com Mr. Greenfield's energy practice spans asset and share sales and acquisitions in Canada and abroad, LNG and oil sands development, facilities construction and operation, production sale contracts, financings, JVs, limited partnerships and farmouts. ROB.indd 18 Mr. Gropper's practice focuses on corporate finance, reorganizations, M&A and commercial real estate. He has advised boards of directors on take-over bids, going-private transactions and other corporate matters. Grout, James H. Thornton Grout Finnigan LLP (416) 304-0557 jgrout@tgf.ca Mr. Grout focuses on insolvency, restructuring and related litigation. His experience embraces the automotive, insurance, mining, securities and hedge fund sectors. He advises the OSC on insolvency matters and the SEC on cross-border cases. Halperin, Stephen H. Hansell, Carol Harbell, James W. Goodmans LLP (416) 597-4115 shalperin@goodmans.ca Davies Ward Phillips & Vineberg LLP (416) 863-5592 chansell@dwpv.com Stikeman Elliott LLP (416) 869-5690 jharbell@stikeman.com Mr. Halperin is a member of the firm's Executive Committee and co-chair of its corporate/securities group. Member of the OSC's Senior Securities Lawyers Advisory Group. Highest ranking by Chambers Global in Corporate/M&A for the past nine years. Ms. Hansell advises on a wide range of corporate and securities matters. She represents management, boards, committees and investors in the context of transactions, investigations, special committees and their governance practices generally. Mr. Harbell focuses on energy, P3s, infrastructure and real estate. His work includes M&A transactions, development, project finance and procurement for electricity and gas companies, utilities and government entities. 13-04-23 12:07 PM Ha Bro Bla Gra (40 mh Mr. M&A ene the infra expe petr sand pipe