Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for Li & Fung Limited (Li & Fung) structured products, stock futures and options contracts with Li & Fung shares as underlying asset to account for the privatisation of Li & Fung and the withdrawal of its listing.
Corporate action overview
|
Company (Stock Code)
|
Li & Fung (494)
|
|
Corporate Action
|
Privatisation of Li & Fung and withdrawal of listing of Li & Fung
|
|
Last Day for Dealing (LDD)
|
15 May 2020
|
For further details of the privatisation, please refer to the announcement made by Li & Fung on 12 May 2020.
Structured Products with shares of Li & Fung as Underlying Asset
The listing documents of all existing structured products with the shares of Li & Fung as underlying asset (the Structured Products) contain provisions that deal with delisting of the underlying company.
As announced by issuers of the Structured Products on 20 April 2020, trading of the Structured Products will be suspended from 18 May 2020 and will not resume. The cash settlement amount (if any) of the Structured Products will be calculated based on the cancellation price of $1.25.
Structured product issuers will make further announcements regarding the Structured Products in due course.
Arrangements for stock futures and options
Highlights of the arrangements are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
- Margining, clearing and settlement arrangements of Li & Fung stock futures and options contracts will be as normal on or before the LDD.
- All outstanding Li & Fung stock futures contracts (regardless of their maturities) on LDD will be converted into their cash value based on the cancellation price of $1.25. Any resulting cash value will be credited to / debited from the relevant CCMS collateral accounts on day-end of LDD. Li & Fung stock futures open positions will be closed by HKFE Clearing Corporation Limited (HKCC) before market open on the business day immediately after the LDD. Participants will not be charged for the cash conversion.
- All in-the-money Li & Fung stock option contracts on LDD will be converted into their intrinsic values in cash based on the difference between the strike price and the cancellation price of $1.25. Cash conversion will be made on the business day immediately after the LDD. No physical delivery of underlying shares will be involved and Participants will not be charged for the cash conversion.
For further details of the arrangement of Li & Fung futures and options, please refer to the circulars issued by HKEX.
Ends