Swire Pacific : (1) PROPOSAL FOR THE PRIVATISATION OF HONG KONG AIRCRAFT ENGINEERING COMPANY LIMITED BY SWIRE PACIFIC LIMITED BY WAY OF A SCHEME OF ARRANGEMENT UNDER SECTION 673 OF THE COMPANIES ORDINANCE AND (2) PROPOSED WITHDRAWAL OF LISTING OF HONG KONG AIRCRAFT ENGINEERING COMPANY LIMITED

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubtas to any aspect of the Proposal, this Scheme Document or as to the action to be taken, you should consult a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant, or other professional adviser.

If you have sold or transferredall your shares in Hong Kong Aircraft Engineering Company Limited, you should at once hand this Scheme Document and the accompanying forms of proxy to the purchaser or transferee or to the licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this Scheme Document, make no representation as to their accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Scheme Document.

This Scheme Document appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of Swire Pacific Limited or Hong Kong Aircraft Engineering Company Limited.

SWIRE PACIFIC LIMITED	HONG KONG AIRCRAFT ENGINEERING
˄ٰ̚΅Ϟࠢʮ̡	COMPANY LIMITED
࠰ಥ࠭ዚʈ೻Ϟࠢʮ̡
(Incorporated in Hong Kong	(Incorporated in Hong Kong
with limited liability)	with limited liability)
(Stock Codes: 19 and 87)	(Stock Code: 44)

(1) PROPOSAL FOR THE PRIVATISATION OF HONG KONG AIRCRAFT ENGINEERING COMPANY LIMITED

BY SWIRE PACIFIC LIMITED BY WAY OF

A SCHEME OF ARRANGEMENT

UNDER SECTION 673 OF THE COMPANIES ORDINANCE

AND

(2) PROPOSED WITHDRAWAL OF LISTING OF HONG KONG AIRCRAFT ENGINEERING COMPANY LIMITED

Financial Adviser to Swire Pacific Limited

Independent Financial Adviser to the HAECO Independent Board Committee

SOMERLEY CAPITAL LIMITED

Unless the context otherwise requires, capitalised terms used in this Scheme Document (including this cover page) are defined in the section headed "Definitions" of this Scheme Document.

A letter from the HAECO Board is set out on pages 16 to 25 of this Scheme Document. A letter from the HAECO Independent Board Committee containing its advice to the Independent HAECO Shareholders in relation to the Proposal is set out on pages 26 to 27 of this Scheme Document. A letter from Somerley, being the HAECO Independent Financial Adviser, containing its advice to the HAECO Independent Board Committee in relation to the Proposal is set out on pages 28 to 58 of this Scheme Document. An Explanatory Statement is set out on pages 59 to 78 of this Scheme Document.

The actions to be taken by the HAECO Shareholders are set out on pages 4 to 6 of this Scheme Document.

Notices convening the Court Meeting and the General Meeting to be held at the Ballroom, Level 5, Island Shangri-La Hong Kong, Pacific Place, Supreme Court Road, Central, Hong Kong on Wednesday, 10 October 2018 at 10:00 a.m. and 10:30 a.m. respectively (or, in the case of the General Meeting, as soon thereafter as the Court Meeting shall have concluded or been adjourned) are set out on pages 128 to 130 and 131 to 133 of this Scheme Document respectively. Whether or not you are able to attend the Court Meeting and/or the General Meeting or any adjournment thereof in person, you are strongly urged to complete and sign the enclosedpinkform of proxy in respect of the Court Meeting and the enclosedwhiteform of proxy in respect of the General Meeting, in accordance with the instructions printed thereon and to lodge them at the Share Registrar at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible, but in any event no later than the respective times and dates as stated under the section headed "Actions to be taken" set out on pages 4 to 6 of this Scheme Document. Completion and return of the forms of proxy for Court Meeting and/or the General Meeting will not preclude you from attending and voting in person at the relevant meeting or any adjournment thereof, should you so wish. In the event that you attend and vote at the relevant meeting or any adjournment thereof after having lodged your forms of proxy, the returned forms of proxy shall be deemed to have been revoked by operation of law.

This Scheme Document is issued jointly by Swire Pacific and HAECO. In case of inconsistency, the English language text of this Scheme Document shall prevail over the Chinese language text.

14 September 2018

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

NOTICE TO US INVESTORS

The Proposal is being made to cancel the securities of a Hong Kong company by means of a scheme of arrangement provided for under the Companies Ordinance and is subject to Hong Kong disclosure requirements, which are different from those of the US. The financial information included in this Scheme Document (if any) has been prepared in accordance with Hong Kong Financial Reporting Standards and thus may not be comparable to the financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles of the US.

A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules of the US Securities Exchange Act of 1934, as amended. Accordingly, the Proposal is subject to the disclosure requirements and practices applicable in Hong Kong to schemes of arrangement, which differ from the disclosure requirements of the US tender offer rules.

This Scheme Document does not constitute an offer or invitation to purchase or subscribe for any securities of HAECO in the US.

The receipt of cash pursuant to the Proposal by a US holder of Scheme Shares as consideration for the cancellation of their Scheme Shares pursuant to the Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other tax laws. Each holder of Scheme Shares is urged to consult their independent professional adviser immediately regarding the potential tax consequences of the Proposal.

It may be difficult for US holders of Scheme Shares to enforce their rights and claims arising out of the US federal securities laws, as Swire Pacific and HAECO are located in a country other than the US and some or all of their officers and directors may be residents of a country other than the US. US holders of Scheme Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

CONTENTS

Page

ACTIONS TO BE TAKEN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

EXPECTEDTIMETABLE.................................................... 13

LETTERFROMTHEHAECOBOARD......................................... 16

LETTER FROM THE HAECO INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . 26

LETTER FROM THE HAECO INDEPENDENT FINANCIAL ADVISER. . . . . . . . . . . . . . . 28

EXPLANATORYSTATEMENT............................................... 59

APPENDIX I - FINANCIAL INFORMATION RELATING TO THE HAECO GROUP. 79

APPENDIX II - PROPERTYVALUATIONREPORT.......................... 83

APPENDIX III - GENERALINFORMATION................................. 112

THESCHEME............................................................ 121

NOTICE OF COURT MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

NOTICEOFGENERALMEETING............................................ 131

1. ACTIONS TO BE TAKEN BY HAECO SHAREHOLDERS

For the purpose of determining the entitlements of the holders of Scheme Shares to attend and vote at the Court Meeting and the entitlements of the HAECO Shareholders to attend and vote at the General Meeting, the register of members of HAECO will be closed from Thursday, 4 October 2018 to Wednesday, 10 October 2018 (both days inclusive) and during such period, no transfer of HAECO Shares will be effected. In order to qualify to vote at the Court Meeting and the General Meeting, all transfers accompanied by the relevant share certificates must be lodged with the Share Registrar at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong before 4:30 p.m. on Wednesday, 3 October 2018. A subsequent purchaser of Scheme Shares will need to obtain a proxy form from the transferor if he wishes to attend or vote at the Court Meeting or the General Meeting.

Apinkform of proxy for use at the Court Meeting and awhiteform of proxy for use at the General Meeting are enclosed with this Scheme Document.

Whether or not you are able to attend the Court Meeting and/or the General Meeting or any adjournment thereof in person, if you are a holder of Scheme Shares, you are strongly urged to complete and sign the enclosedpinkform of proxy in respect of the Court Meeting, and if you are a HAECO Shareholder, we strongly urge you to complete and sign the enclosedwhiteform of proxy in respect of the General Meeting, in accordance with the instructions printed thereon, and to lodge them at the office of the Share Registrar at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong.In order to be valid, the pink form of proxy for use at the Court Meeting should be lodged no later than 48 hours before the time appointed for holding the Court Meeting or any adjournment thereof, and the white form of proxy for use at the General Meeting should be lodged no later than 48 hours before the time appointed for holding the General Meeting or any adjournment thereof.

The completion and return of a form of proxy for the Court Meeting and/or the General Meeting will not preclude you from attending and voting in person at the relevant meeting or any adjournment thereof. In the event that you attend and vote at the relevant meeting or any adjournment thereof after having lodged your form of proxy, the returned form of proxy will be deemed to have been revoked by operation of law.

If you do not appoint a proxy and you do not attend and vote at the Court Meeting and/or the General Meeting, you will still be bound by the outcome of the Court Meeting and/or the General Meeting. You are therefore strongly urged to attend and vote at the Court Meeting and/or the General Meeting in person or by proxy.

Voting at the Court Meeting and the General Meeting will be taken by poll as required under the Listing Rules and the Takeovers Code.

HAECO and Swire Pacific will make an announcement in relation to the results of the Court Meeting and the General Meeting and, if all the resolutions are passed at those meetings, further announcements will be made in relation to, among other things, the results of the hearing of the petition for the sanction of the Scheme by the High Court, the Effective Date and the date of withdrawal of listing of HAECO Shares from the Stock Exchange in accordance with the requirements of the Takeovers Code and the Listing Rules.

2. ACTIONS TO BE TAKEN BY BENEFICIAL OWNERS WHOSE HAECO SHARES ARE HELD BY A REGISTERED OWNER OR DEPOSITED IN CCASS

No person shall be recognised by HAECO as holding any HAECO Shares on trust.

If you are a Beneficial Owner whose HAECO Shares are registered in the name of a nominee, trustee, depositary or any other authorised custodian or third party, you should contact such Registered Owner to give instructions to and/or to make arrangements with such Registered Owner as to the manner in which the HAECO Shares beneficially owned by you should be voted at the Court Meeting and/or the General Meeting.

If you are a Beneficial Owner who wishes to attend the Court Meeting and/or the General Meeting personally, you should:

• (a) contact the Registered Owner directly to make the appropriate arrangements with the Registered Owner to enable you to attend and vote at the Court Meeting and/or the General Meeting and, for such purpose, the Registered Owner may appoint you as its proxy; or

• (b) arrange for some or all of the HAECO Shares registered in the name of the Registered Owner to be transferred into your own name.

The appointment of a proxy by the Registered Owner at the Court Meeting and/or the General Meeting shall be in accordance with all relevant provisions in the articles of association of HAECO.

In the case of the appointment of a proxy by the Registered Owner, the relevant forms of proxy shall be completed and signed by the Registered Owner and shall be lodged in the manner and no later than the latest time for lodging the relevant forms of proxy as more particularly set out in this Scheme Document.

The completion and return of a form of proxy for the Court Meeting and/or the General Meeting will not preclude the Registered Owner from attending and voting in person at the relevant meeting or any adjournment thereof. In the event that the Registered Owner attends and votes at the relevant meeting or any adjournment thereof after having lodged his forms of proxy, the returned form of proxy will be deemed to have been revoked by operation of law.

If you are a Beneficial Owner whose HAECO Shares are deposited in CCASS and registered under the name of HKSCC Nominees, you must, unless you are an Investor Participant, contact your broker, custodian, nominee or other relevant person who is, or has, in turn, deposited such HAECO Shares with, a CCASS participant regarding voting instructions to be given to such persons, or alternatively to arrange for some or all of such HAECO Shares to be withdrawn from CCASS and transferred into your own name, if you wish to vote in respect of the Scheme. The procedure for voting in respect of the Scheme by the Investor Participants and the Other CCASS Participants with respect to HAECO Shares registered under the name of HKSCC Nominees shall be in accordance with the "General Rules of CCASS" and the "CCASS Operational Procedures" in effect from time to time.