Privatisation of Companies Listed on The Stock Exchange of Hong Kong Limited

By Rossana Chu:

There is an increasing trend of companies listed on the Stock Exchange of Hong Kong Limited (the “Stock Exchange”) going private recently. One common phenomenon is that the listed company’s market capitalization is much lower than its net asset value or business potential, and the trading volume in the company’s shares is low. Thus, the company finds it difficult to raise funds by utilizing its listing status. As financial institutions are ready to extend privatization loans, controlling shareholders will find it commercially sensible to take their listed companies private.

This article discusses the privatisation process of a Hong Kong listed company incorporated outside Mainland China.  The rules for privatizing an H-share company are quite different and the author may cover that in a subsequent article.  READ FULL ARTICLE

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Note: This material has been prepared for general information purposes only and is not intended to be relied upon as professional advice for any cases. Should you need further information or legal advice, please contact us.