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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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.