RE CITIC INTERNATIONAL FINANCIAL HOLDINGS LTD

RE CITIC INTERNATIONAL FINANCIAL HOLDINGS LTD

The court granted the petition because it was satisfied the reduction of capital and share premium had a discernible legitimate purpose (to set off shareholders' indebtedness), the shareholders were treated equitably, and creditors would not be prejudiced given the Company's surplus liquid assets and the undertaking to apply the credit to discharge part of the indebtedness; accordingly the draft order was made.

Citation
RE CITIC INTERNATIONAL FINANCIAL HOLDINGS LTD
Parties
Petitioner (company): CITIC International Financial Holdings Limited; Shareholder: Gloryshare Investments Limited; Shareholder: Banco Bilbao Vizcaya Argentaria, S.A.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
30 April 2009
Case Number
HCMP685/2009
Procedural Posture
Capital Reduction Petition Under Companies Ordinance (cap.32) / Final Judgment (reasons for Judgment Delivered)
Outcome
Petition granted; order made confirming reduction of share capital and reduction of share premium and implementing set-off and other measures in terms of the draft order.
Legal Topics
Reduction of Share Capital, Reduction of Share Premium, Scheme of Arrangement, Creditor Protection and Undertakings, Set Off of Indebtedness, Privatisation
Source Language
EN
Company Law Corporate Restructuring Banking Regulation Creditor Protection Reduction of Share Capital Reduction of Share Premium Scheme of Arrangement Creditor Protection and Undertakings +2 more

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Parties

CITIC International Financial Holdings Limited

Petitioner (company)

Gloryshare Investments Limited

Shareholder

Banco Bilbao Vizcaya Argentaria, S.A.

Shareholder

Procedural Posture

Capital Reduction Petition Under Companies Ordinance (cap.32) / Final Judgment (reasons for Judgment Delivered)

Legal Issues

  1. 1 Whether proposed reduction of share capital and share premium can be confirmed by the court
  2. 2 Whether creditors' interests would be prejudiced by the proposed reductions and set-off arrangements
  3. 3 Whether shareholders are treated equitably by the proposed reorganisation

Ratio Decidendi

The court granted the petition because it was satisfied the reduction of capital and share premium had a discernible legitimate purpose (to set off shareholders' indebtedness), the shareholders were treated equitably, and creditors would not be prejudiced given the Company's surplus liquid assets and the undertaking to apply the credit to discharge part of the indebtedness; accordingly the draft order was made.

Court Disposition

Petition granted; order made confirming reduction of share capital and reduction of share premium and implementing set-off and other measures in terms of the draft order.

Orders

  • Order confirming the reduction of the share capital as per the draft submitted.
  • Order confirming the reduction of the share premium account as per the draft submitted and the application of the credit towards set-off of shareholders' indebtedness.