Rickson Engineering Ltd v. Grandeur Electrical Co Ltd

HCCW 452/2026

[2026] HKCFI 5893

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO. 452 OF 2026

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BETWEEN

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D E C I S I O N

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1.This is an application by Summons dated 17 September 2026 (“Summons”) by Yuen Tsz Chun and Chan Hoi Yan (“PLs”) the provisional liquidators of Grandeur Electrical Company Limited (the “Company”) appointed by Order dated 27 July 2026 of DHCJ Reyes SC to allow the PLs to explore and facilitate the restructuring of the Company.

Relevant background

2.The Company is an electrical sub-contractor on public works projects; as such, it maintains various certificates and is on the approved lists with the Hong Kong Housing Authority (“HA”) and the Development Bureau (“DB”).

3.Rickson Engineering Limited (the “Petitioner”) presented a petition on 17 June 2026 (“Petition”) to wind up the Company based on an unsatisfied statutory demand for HK$1.3 million which the Company does not dispute.

4.The freezing of Company’s bank accounts upon the presentation of the Petition caused the main contractors of live projects to serve default notices, and threatened termination.

5.On 27 July 2026, the Company applied for the appointment of the PLs on the conventional ground that the Company’s assets[1] were in real and immediate jeopardy. The application was expressly not made to promote or explore any restructuring. Hence, the existing powers conferred by §3 of the Order do not extend to the Company’ s restructuring.

6.At the 1^st hearing of the Petition before the Master on 2 September 2026, the PLs reported to the Court, inter alia, the steps taken to preserve the value of the Company’s assets and the fact that three potential investors had expressed an interest in investing in the Company. Whilst the PLs did not oppose a winding up order in due course, they required time to assess the viability of a potential restructuring with interested investors.

7.The Petitioner and Buildland Engineering Limited (“Buildland”), the supporting creditor, agreed by consent summons filed on 27 August 2026 to adjourn the Petition to allow the PLs time to explore a restructuring. The Petitioner agreed to the adjournment on the footing that a concrete restructuring proposal should materialise by the adjourned hearing failing which the Petitioner’s primary position remains that the Petition should not be further adjourned and it would press for a winding up order. The Petition is scheduled to be heard on 4 November 2026.

Applicable principles

8.The power of the court under section 192 of the Companies Ordinance, Cap 32 (“CO”) is to appoint a liquidator or liquidators for the purposes of the winding up and not to avoid a winding up. Such powers are exercised, for example, if it is shown that the assets are in jeopardy. Provided that those purposes exist, there is no objection to extra powers being given to the provisional liquidator(s) to enable a corporate rescue to take place: Re Legend International Resorts Limited [2006] 2 HKLRD 192 (CA) at §§35-36 per Rogers VP.

9.As explained in Re China Solar Energy Holdings Limited HCCW 108/2015, 1 March 2016 at §25, there is a distinction between the appointment of provisional liquidators on the basis that the company was insolvent and the assets are in jeopardy and the appointment of provisional liquidators is solely for the purpose of enabling a corporate rescue to take place. It does not follow that where it is appropriate to appoint provisional liquidators who were then given the requisite extra powers, they may not exercise those powers and explore whether corporate restructuring proposals are viable and in the interests of the creditors and the company.

10.Whether restructuring powers should be granted and the scope of those powers would depend on the circumstances of the particular case such as the support of the creditors: Re Legend at §§ 31, 35; Re China Solar Energy Holdings Limited (No. 2) [2018] 2 HKLRD 338 at §§26, 31.

This application

11.The PLs’ evidence is that since their appointment, five potential investors have expressed interest in acquiring the Company’s shares and/or assets. They consider this to be an appropriate case for the Court to grant extra powers for restructuring.

12.The PLs’ evidence may be summarised as follows:

(i)  The Company received letters[2] from interested investors (“Potential Investor A”) and (“Potential Investor B”) on 31 July 2026 and 14 August 2026 respectively expressing an interest in acquiring the shares of the Company on the footing that certain licences and/or approved statuses may be retained.

(ii)  On 24 August 2026, the PLs met with a potential investor (“Potential Investor C”) who expressed an interest in acquiring the issued shares in the Company and after the meeting indicated that it would consider the matter and provide a letter of intent.

(iii)  On 16 September 2026 the PLs received a letter of intent from “Potential Investor D” who indicated its intention to acquire the Company together with its licences and statuses with HA and DB.

(iv)  On 25 September 2026 the PLs met with the legal representatives of “Potential Investor E” and on the same day received a letter seeking further information to enable Potential Investor E to enable it to prepare an acquisition proposal. The information sought has been provided.

13.The Company’s licences, approved-list statuses and live projects are valuable assets. However, HA has suspended the Company from tendering since 4 August 2026, and DB will suspend the Company from tendering unless its capital shortfalls are rectified. The potential restructuring, which could involve capital injections into addressing the Company’ financial issues, may preserve those valuable statuses. The authorities had been kept informed by the PLs of the possibility of a potential restructuring.

14.The PLs consider that pursuing the restructuring would be in the interests of the creditors as a whole as it may secure a better return for the general body of creditors than a winding up. According to the Statement of Affairs submitted by the Company’s sole director, the net liabilities are stated to be over HK$35 million.

15.The PLs corresponded with the Potential Investors to ascertain the genuineness of their interest. They have been informed of the need to provide a non-refundable deposit and enter into a fee contribution agreement to defray costs to be incurred in the potential restructuring, including costs for preparing documents for a scheme of arrangement.

16.The PLs have refrained from taking further substantive steps or signing any agreements with any of the Potential Investors prior to their being granted extra powers for restructuring.

17.The Petitioner and Buildland have consented to the adjournment of the Petition to 4 November 2026. The Petitioner has indicated that it will press for a winding-up order then if there is no concrete restructuring proposal. Buildland also indicated that it has no objection to the Summons.

18.The Official Receiver has indicated that it would adopt a neutral stance on the Summons.

Disposition

19.Given the existence of five potential investors, the nature of the Company’s assets and the impending hearing on 4 November 2026, it is clearly in the interest of the general creditors that the PLs be given the extra powers sought in the Summons and take substantive steps towards securing a restructuring so as to preserve the valuable statuses the Company possesses.

20.Accordingly, I make an order in terms as amended of the draft order submitted at the hearing: §1 confers the restructuring powers on the PLs and is modelled on the appointment order set out in China Solar (No 2) at §10; §2 requires the PLs to report to the Petitioner’s solicitors in writing on the progress of the formulation of the restructuring proposal no later than 3 days before the hearing of the Petition on 4 November 2026; and §3 provides for the costs of this application of the PLs and the Petitioner to be paid out of the Company’s assets.

21.The PLs and the Petitioner submitted their respective statements of costs for summary assessment under O 62, r 9A. Summary assessment would take place in Chambers.

Ms Sharon Yuen, instructed by Messrs. Withers, for the Joint and Several Provisional Liquidators

Ms Terri Ha, instructed by Messrs. VL Lawyers, for the Petitioner

Attendance of the Official Receiver was excused

Attendance of the Creditor was excused