RE RIVERA (HOLDINGS) LTD

HCMP 651/2021

[2021] HKCFI 2443

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 651 OF 2021

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D E C I S I O N

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1.  On 24 June 2021 I made an order for the Company to convene a meeting of shareholders to consider an offer to privatise the Company which is listed on the Main Board of the Hong Kong Stock Exchange and incorporated in Hong Kong.

2.  The meeting took place on 23 July 2021, the necessary majorities required to satisfy both of Provisional of the Companies Ordinance and the takeover code were comfortably achieved.

3.  The principles by reference to which the court considers petitions to sanction schemes of arrangement introduced by companies to privatise them.  At the instigation normally of the majority shareholder had been summarised in various decisions.  In Re China Power Clean Energy Development Company Limited [1], I summaries them as follows:

“5. The present application is made pursuant to sections 673 and 674 of the Companies Ordinance, Cap 622 (‘Ordinance’).

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

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

(2) 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;

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

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

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

(6) 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 [2]; Re China Light & Power Co Ltd [3]; Re Cable & Wireless HKT Ltd [4]; Re PCCW Ltd [5]; Re Wheelock Properties Ltd [6]; Re Cheung Kong Holdings Ltd [7]; and Re China Assets (Holdings) Limited [8].”

4.  As I noted in China Power, it is well-established that the privatisation of a listed company is a permissible purpose for a scheme of arrangement; Re Wheelock Properties Ltd [9].  I am satisfied that in the present case, the above criteria have comfortably been satisfied and that there is no impediment to the court exercising its discretion to sanction the Scheme which has been unopposed before me today.

5.  The Offeror—Step Famous Investment Limited has undertaken to the court to be bound by the Scheme as is common for schemes of this sort and to execute and to procure to be executed all documents and things necessary to fully implement the Scheme.

6.  As is also a common component of schemes to privatise a listed company, the structure of the privatisation involves a technical reduction of capital.  This was approved by the necessary special resolution of the Company passed on 23 July 2021.  I have been presented with a minute recording that special resolution which will be appended to the order which has been provided to me today for my approval.

7.  I will make an order in the terms of the draft which has been handed to the court sanctioning the scheme of arrangement.