Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for the adjustment to Hengan International Group Company Limited (Hengan) structured products and options to account for Hengan’s spin-off and separate listing of the QinQin Foodstuffs Group (Cayman) Company Limited on HKEX’s securities market by way of a conditional distribution in specie.
Overview
For details, please refer to the announcements made by Hengan on 31 March 2016 and 17 June 2016.
Highlights of the adjustment arrangements are set forth below. Investors should consult their brokers for further details, or if they have any questions regarding the adjustment.
Structured products with shares of Hengan as underlying asset
The listing documents for structured products with the shares of Hengan International Group as underlying assets contain provisions that deal with corporate actions of the company. For the spin-off of Qinqin Foodstuffs Group (Cayman) Company Limited, terms of Hengan International Group structured products, including entitlement and exercise price will be adjusted on the day following the listing of Qinqin.
Trading of structured products with shares of Hengan International Group as underlying assets will be suspended from 28 June 2016 to the listing date of Qinqin (both dates inclusive).
Structured product issuers are required to make announcements regarding the above adjustments and trading suspensions, and investors should read the contents of such announcements carefully.
Hengan Options
Trading Arrangements
The trading arrangements for the existing Hengan stock options under trading symbol HGN will be as follows:
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1.
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Transfer of Outstanding Positions
Outstanding positions of Hengan stock option class under trading symbol HGN which exist after the market close on the business day immediately before the ex-date will be transferred on a one-to-one basis to temporary trading symbol HGA.
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2.
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Suspension of Trading
Since the value of the Entitlement is not available until the value of QinQin is determined, trading of outstanding positions under temporary trading symbol HGA will be suspended from the ex-date (i.e. 28 June 2016) to the listing day of QinQin (both dates inclusive).
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Introduction of New Stock Option Series for Trading
On the ex-date, new Hengan stock option series based on the standard contract size will be introduced for trading under the standard trading symbol HGN.
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Adjustment to Outstanding Positions upon the Determination of QinQin’s Value
The value of QinQin will be determined by the volume weighted average price (VWAP) of those auto-matched trades of QinQin on its listing day on the SEHK. When the value of the Entitlement has been determined, adjustment will be made to outstanding positions under trading symbol HGA. The adjusted positions will be transferred to trading symbol HGB. Positions under trading symbol HGB will commence trading from the business day immediately after the listing day of QinQin.
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Details of the adjustment procedures for Hengan stock option series under trading symbol HGN are as follows:
Investors should note that the adjusted and standard stock options have different contract sizes. There will not be any changes to the number of open positions and other contract terms after the transfer of positions.
For detailed trading and clearing arrangements, please refer to the circular.
Ends