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Swire Pacific to privatize aircraft engineering unit under HK$3B scheme

Swire Pacific Ltd. is planning to privatize and delist its Hong Kong-based aircraft engineering and maintenance services subsidiary for nearly HK$3.00 billion in cash, citing the business' low liquidity and its shares' relative trading underperformance.

Under the conditional share-cancellation scheme, eligible shareholders of Hong Kong Aircraft Engineering Co. Ltd. will receive HK$72 for every share held, which is an approximately 115.1% premium to its HK$33.48-per-share audited consolidated net asset value as of Dec. 31, 2017. Any dividends will be deducted from the offer price.

The unit's delisting from the Hong Kong stock exchange is conditional on the implementation of the scheme.

As of June 10, the Hong Kong-based conglomerate has a roughly 74.99% stake in the target. It also secured an additional 3.14% interest from irrevocable and unconditional agreements signed with certain shareholders.

Swire said the delisting will allow it to consolidate its control over the subsidiary in a more efficient and cost-effective manner. It added that Hong Kong Aircraft Engineering's listed status is not a viable source of funding for the business anymore.

Moelis & Co. Asia Ltd. is Swire's financial adviser.