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Hong Kong Exchanges and Clearing Limited (HKEx) has announced the arrangements for the adjustment to China Overseas Land & Investment Limited (China Overseas) structured products and options to account for China Overseas' spin-off and separate listing issue.
Overview
|
Company (Stock Code) |
China Overseas Land & Investment Limited (688) |
|
Corporate Action |
Spin-off and separate listing of the China Overseas Property Holdings Limited (COPL) on the SEHK by way of a distribution in specie (Entitlement) |
|
Entitlement Ratio |
0.3333 (1 COPL Share for every 3 China Overseas Shares) |
|
Ex-date |
16 October 2015 |
|
Listing Day of COPL |
23 October 2015 |
For details, please refer to the announcements made by China Overseas on 6 July and 9 October 2015.
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 China Overseas as underlying asset
The listing documents for structured products with the shares of China Overseas as underlying assets contain provisions that deal with corporate actions of the company, including spin-offs. For the spin-off of COPL, terms of China Overseas structured products, including entitlement, exercise price and call price, as appropriate, will be adjusted on the day following the listing of COPL.
Trading of structured products with shares of China Overseas as underlying assets will be suspended from 16 October to 23 October (both date inclusive). During the suspension period, there will not be any Mandatory Call Events for Callable Bull/Bear Contracts, or CBBCs, linked to China Overseas.
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.
China Overseas Options
Trading Arrangements
| 1. |
Transfer of Outstanding Positions Outstanding positions of China Overseas stock option class under trading symbol COL 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 COA. |
| 2. |
Suspension of Trading Since the value of the Entitlement is not available until the value of COPL is determined, trading of outstanding positions under temporary trading symbol COA will be suspended from the ex-date (i.e. 16 October 2015) to the listing day of COPL (i.e. 23 October 2015) (both dates inclusive). |
| 3. |
Introduction of New Stock Option Series for Trading On the ex-date, new China Overseas stock option series based on the standard contract size will be introduced for trading under the standard trading symbol COL. |
| 4. |
Adjustment to Outstanding Positions upon the Determination of COPL's Value The value of COPL will be determined by the volume weighted average price (VWAP) of those auto-matched trades of COPL 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 COA. The adjusted positions will be transferred to trading symbol COB. Positions under trading symbol COB will commence trading from the business day immediately after the listing day of COPL. |
Details of the adjustment procedures are as follows:
|
Adjustment Term |
Formula |
Remarks |
|
Adjustment Ratio (AR) |
(Underlying stock closing price before ex-date minus Entitlement value) / Underlying stock closing price before ex-date |
Rounded to the nearest 4 decimal places |
|
Adjusted Exercise Price (AEP) |
Exercise price of outstanding stock option series x AR |
Rounded to the nearest 2 decimal places |
|
Adjusted Contract Size (ACS) |
Exercise price of outstanding stock option series x |
Rounded to the nearest 4 decimal places |
Remark: Entitlement is COPL's value times the Entitlement Ratio for each China Overseas share
Below is a summary of the trading arrangement for all China Overseas stock option contracts:
|
Contract |
Trading Symbol |
Underlying Stock |
Contract Size(Shares) |
Introduction Date |
Availability For Trading |
Addition of New Stock Option Series on and after ex-date |
|
Standard |
COL |
China Overseas |
2,000 |
Ex-date |
From ex-date onwards |
Yes |
|
Adjusted |
COA |
China Overseas & Entitlement |
2,000 |
Ex-date |
Nil |
No |
|
COB |
China Overseas |
ACS |
The 1st business day after the listing day of COPL |
From introduction |
Investors should note that the adjusted and standard stock option series will 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 operational arrangement, please refer to the circular.
