Given current financial conditions in the equity markets,
opportunities for privatisations abound and schemes or arrangement
are all the rage again. They can be used for Bermuda, Cayman and
BVI companies.
A scheme of arrangement is essentially an agreement, approved by
the requisite majority of shareholders and imposed on the minority
shareholders, between a company and its shareholders, as a result
of which scheme shares are compulsorily transferred to a bidder or
are cancelled, such that the target company becomes wholly owned by
the bidder. Schemes of arrangement are therefore an important tool
to privatise companies. Indeed, for various reasons, a scheme of
arrangement is the most common method to privatise a company listed
on HKSE.
