In Re Easy Concepts Ltd.
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HCMP001656/1998 HCMP1656/98 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO.MP1656 OF1998 -------------
------------- Coram : Hon Mrs Justice Le Pichon in Court Date of Hearing : 8 June 1998 Date of Judgment : 8 June 1998 ------------------------ J U D G M E N T ------------------------ 1. This is a petition under section 166 of the Companies Ordinance for the court's sanction of a Scheme of Arrangement ("the Scheme") and for its confirmation of a reduction of capital. 2. The Company which is registered in Hong Kong has an authorized share capital of 100,000,000 shares, of which 64,797,832 shares has been issued. The object of the Scheme is to carry out a group reorganization under which the Company will, through Easy Concepts BVI, become a wholly-owned subsidiary of Easy Concepts International Holdings Limited ("ECIH"), a Bermuda corporation, and the shareholders of the Company will become shareholders of ECIH. Effectively the existing shareholders will be issued with 10 shares in ECIH for every scheme share held. It is also the intention that if the Scheme is sanctioned by the court, the listing of the shares of the Company on the Stock Exchange of Hong Kong Limited will be withdrawn and replaced by the listing of the shares of ECIH. 3. ECIH was recently incorporated for the purposes of the Scheme and its present authorized share capital is $100,000 divided into one million shares of $0.10 each. 4. On 27 April 1998, by order of this court, the Company was authorized to convene a court meeting which was held on 25 May 1998. At that meeting, the resolution that the Scheme of Arrangement be approved was passed unanimously. The Scheme does not involve any payment of capital or diminution of any liability in respect of unpaid share capital. 5. The Scheme involves the cancellation of the existing issued share capital of the Company. Upon the reduction of capital taking effect, the authorized share capital of the Company will be increased to its former amount by the creation of such number of new ordinary shares as is equal to the number of issued shares cancelled. The Company is then to apply the credit arising in its books from the reduction of capital in paying up in full the new ordinary shares to be created, which will be issued and credited as fully paid to Easy Concepts BVI. Easy Concepts BVI will then allot and issue to ECIH such number of shares as Easy Concepts BVI and ECIH shall agree, and in consideration of the cancellation of their existing holdings of ordinary shares in the capital of the Company, the shareholders of the Company will receive new ordinary shares in ECIH credited as fully paid and ranking pari passu in all respects with the other ordinary shares in ECIH in issue. And for every ordinary share of the Company held, 10 ordinary shares in ECIH will be allotted. It will be seen that the reduction of capital is essentially a technical exercise. Creditors will not be adversely affected by the Scheme and the court by order dated 1 June 1998 dispensed with the settlement of the list of creditors under section 59(2) of the Companies Ordinance. 6. As the resolution has been duly passed and the Scheme which has been properly explained, involves no unfairness, and the four requirements for the reduction of capital has been satisfied, this is a proper case for the exercise of my discretion. See Re China Light & Power Ltd. and CLP Holdings [1998] 1 HKC 170. I therefore sanction the Scheme of Arrangement and confirm the reduction of capital sought. (Doreen Le Pichon) Judge of the Court of First Instance Representation: Mr Winston Poon, SC, inst'd by M/s Richards Butler, for Applicant |