Financing Of Cayman Take Privates

Recently there have been an increasing number of companies listed in the USA with their main operations in China been taken private by their founders. Invariably these listed companies are incorporated in the Cayman Islands.

Parties are taking advantage of amendments to the Cayman Companies Law (as amended) (Companies Law) in 2009 which allowed for mergers or consolidations under certain circumstances involving Cayman companies without the need for court approval, which can have significant cost and timing implications.

A typical "take private" will utilise the Companies Law to effect a statutory merger by the founders of the listed company setting up a new Cayman company (MergerCo) which will merge with the listed company (Target), the Target being the "surviving company".