RE CITIC INTERNATIONAL FINANCIAL HOLDINGS LTD

RE CITIC INTERNATIONAL FINANCIAL HOLDINGS LTD

The court sanctioned the scheme and confirmed the reduction of capital because the class was properly constituted, members were adequately informed, the scheme met statutory and Takeovers Code voting thresholds, there was equitable treatment of scheme shareholders, independent advisers recommended the scheme, creditors would not be prejudiced and the reduction served a discernible corporate purpose; orders were made subject to usual undertakings by the Offeror and BBVA.

Citation
RE CITIC INTERNATIONAL FINANCIAL HOLDINGS LTD
Parties
Petitioner: CITIC International Financial Holdings Limited; Offeror: Gloryshare Investments Limited; Interested Shareholder: Banco Bilbao Vizcaya Argentaria, S.A.; Scheme Members (disinterested Class): Minority Shareholders
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
6 November 2008
Case Number
HCMP1686/2008
Procedural Posture
Scheme of Arrangement and Reduction of Capital Under Companies Ordinance (s166 and S59) / Judgment (sanction Hearing and Confirmation of Reduction)
Outcome
Scheme of arrangement sanctioned and reduction of capital confirmed by the Court of First Instance; orders made in terms of the draft and usual undertakings accepted
Legal Topics
Scheme of Arrangement, Reduction of Capital, Privatization, Class Meetings and Voting Thresholds, Creditor Protection, Takeovers Code Compliance
Source Language
EN
Company Law Corporate Restructuring Securities/takeovers Law Scheme of Arrangement Reduction of Capital Privatization Class Meetings and Voting Thresholds Creditor Protection +1 more

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Parties

CITIC International Financial Holdings Limited

Petitioner

Gloryshare Investments Limited

Offeror

Banco Bilbao Vizcaya Argentaria, S.A.

Interested Shareholder

Minority Shareholders

Scheme Members (disinterested Class)

Procedural Posture

Scheme of Arrangement and Reduction of Capital Under Companies Ordinance (s166 and S59) / Judgment (sanction Hearing and Confirmation of Reduction)

Legal Issues

  1. 1 Whether the scheme of arrangement should be sanctioned under section 166 of the Companies Ordinance
  2. 2 Whether the class of members was properly constituted and fairly represented at the meeting
  3. 3 Whether the reduction of share capital could be confirmed under section 59 of the Companies Ordinance without prejudicing creditors

Ratio Decidendi

The court sanctioned the scheme and confirmed the reduction of capital because the class was properly constituted, members were adequately informed, the scheme met statutory and Takeovers Code voting thresholds, there was equitable treatment of scheme shareholders, independent advisers recommended the scheme, creditors would not be prejudiced and the reduction served a discernible corporate purpose; orders were made subject to usual undertakings by the Offeror and BBVA.

Court Disposition

Scheme of arrangement sanctioned and reduction of capital confirmed by the Court of First Instance; orders made in terms of the draft and usual undertakings accepted

Orders

  • Order sanctioning the scheme of arrangement dated 16 September 2008 on the usual undertaking given by the Offeror and BBVA to be bound by the scheme
  • Order confirming the reduction of the authorised and issued share capital and restoring authorised capital by creation of new shares in terms of the special resolution and draft submitted