Continued Listing On SEHK Requires Sufficient Level Of Operations Or Assets Value

Keywords: Listco, HKEx, Parentco, Takeovers Code, Listing Rule

Hong Kong Exchanges and Clearing Limited (HKEx) published a listing decision "HKEx-LD35-2012" on 31 July 2012 in which it determined that the subject listed company (Listco) would not have sufficient operations or assets of sufficient value after completion of a series of proposed transactions to warrant its continued listing on The Stock Exchange of Hong Kong Limited (SEHK).

Background

The Listco and its parent company (Parentco) intended to enter into the following series of transactions (Transactions):

• Step 1 - The Listco would inject a substantial part of its existing business into its wholly-owned subsidiary (Subsidiary). On a pro-rata basis, all the shares of the Subsidiary would be distributed to the Listco's shareholders (Distribution). The Distribution was conditional on approval by the Listco's shareholders (excluding the Parentco).