Re Hong Kong Aircraft Engineering Co Ltd

HCMP 1065/2018

[2019] HKCFI 64

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1065 OF 2018

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Before:  Hon Harris J in Chambers

Date of Hearing:  28 November 2018

Date of Decision:  28 November 2018

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D E C I S I O N

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1.On 10 September 2018 I made an order on the application of Hong Kong Aircraft Engineering Company Limited (“Company”) for a meeting to be convened to consider a scheme for the privatisation of the company (“Scheme”). The privatisation was initiated by the Company’s major shareholder Swire Pacific Limited which, at the material time, held just short of 75% of the Company’s issued share capital.

2.The meeting was convened on 10 October 2018.  96.28% of shareholders who attended in person or by proxy and voted in respect of the resolution to approve the privatisation voted in favour of it. 

3.On 1 November 2018, the Company issued a petition seeking the court’s sanction, pursuant to section 673 of the Companies Ordinance (Cap 622), of the Scheme.  I heard that petition today.

4.I have most recently considered the function of the court at the hearing of petition to sanction a scheme in my decision in Re Enice Holding Co Ltd [2018] 4 HKLRD 736:

“37. The function of the court at the hearing of a petition to sanction a scheme is to consider:

(a) whether the scheme is for a permissible purpose;

(b) whether members who were called on to vote as a single class had sufficiently similar legal rights that they could consult together with a view to their common interest at a single meeting;

(c) whether the meeting was duly convened in accordance with the court’s directions;

(d) whether members have been given sufficient information about the scheme to enable them to make an informed decision whether or not to support it;

(e) whether the necessary statutory majority has been obtained; and

(f) whether the court is satisfied in the exercise of its discretion that an intelligent and honest man acting in accordance with his interests as a member of the class within which he voted might reasonably approve the scheme.

See Re Dorman, Long & Co Ltd;[1] Re China Light & Power Co Ltd;[2] Re Cable & Wireless HKT Ltd;[3] Re PCCW Ltd;[4] Re Wheelock Properties Ltd;[5] Re Cheung Kong Holdings Ltd;[6] and Re China Assets (Holdings) Ltd.[7]

38. First, it is well-established that privatising a listed company is a permissible purpose for a scheme of arrangement: see Re Wheelock Properties Ltd [8] and Re China Assets (Holdings) Ltd.[9]”

As is apparent from the above passage, privatising a listed company is a permissible purpose for a scheme of arrangement and many such schemes have been sanctioned by this court. 

5.I am satisfied that the criteria described in the passage that I have quoted are satisfied in the present case.  No dissenting shareholder has attended court and raised any objection to the Scheme being sanctioned.

6.I will, therefore, make an order in the terms of the draft that has been presented to the court sanctioning the scheme, and confirming the technical reduction of share capital which is a necessary part of the mechanism of the Scheme, and the normal ancillary orders.

Mr José-Antonio Maurellet SC and Ms Jasmine Cheung, instructed by Deacons, for the applicant