The scheme consists of three stages. In essence, firstly, the holding company of the Cheung Kong Group will be changed from Cheung Kong to CKH Holdings by way of a scheme of arrangement (the “Cheung Kong Reorganisation Proposal”). After completion, Cheung Kong will cease to be listed on the Main Board whereas CKH Holdings will become listed on the Main Board and control and operate the same assets and businesses as Cheung Kong. The second stage will involve an intra-group change in shareholding of Husky Energy Inc. and a scheme of arrangement of Hutchison. Hutchison will become an indirect wholly-owned subsidiary of CKH Holdings and no longer be listed. At last, the real estate assets that are currently spread across Hutchison and Cheung Kong’s portfolios will be consolidated into CK Property, which will be then spun off and listed on the Main Board.
This article will give an overview of the Cheung Kong Reorganisation Proposal, based on presently and publicly available information.
Reasons for the Cheung Kong Reorganisation Proposal
How was the scheme of arrangement carried out?
Scheme of arrangement
In consideration for the cancellation and extinguishment of the Scheme Shares, holders of the Scheme Shares generally received CKH Holdings shares (ranking pari passu with each other), credited as fully paid, on the basis of 1 CKH Holdings share for every 1 Scheme Share.
Being a Court-driven process, the scheme of arrangement under the Cheung Kong Reorganisation Proposal involved application to the Court for an order to convene the Court Meeting, which took place on 14 January 2015. The order was granted on 3 February 2015. Cheung Kong then despatched the Listing Document, together with other ancillary notices and documents in relation to the Court Meeting and the EGM to its shareholders on 6 February 2015. The Court Meeting and the EGM were successively convened on 25 February 2015, where shareholders of Cheung Kong granted their approval of the scheme and ancillary procedures to implement the same in the said meetings.
Cheung Kong returned to the Court which heard a summons for directions in respect of the scheme of arrangement on 5 March 2015. Sanction of the scheme of arrangement was granted upon hearing of Cheung Kong’s petition on 17 March 2015.
On 18 March 2015, the effective date of the scheme of arrangement, listing of the Cheung Kong shares on the Main Board was withdrawn, whereas the CKH Holdings shares in issue and to be issued pursuant to the scheme of arrangement were listed on the Main Board and were traded on the Main Board under Cheung Kong’s former stock code (0001). CKH Holdings became the new and ultimate holding company of the Cheung Kong Group: Cheung Kong and its subsidiaries became subsidiaries of CKH Holdings.
Benefits by way of a scheme of arrangement
The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
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Published by ONC Lawyers © 2015