Boustead Projects

[ghchua]

Hi setan,

I think I have explained on post #286 of this topic on the options that the offeror have if this GO to delist Boustead Projects failed. Please refer back as I do not wish to repeat myself again.

As for suspension, it won't be forever. Either they restore the free float back to the listing requirements, or they would be directed to delist. As long as you are listed, you will have to pay listing fees.

The offer will not lapse as it is already unconditional. So, shareholders who accepted the offer will be paid accordingly. However, delisting will not occur after this offer closes as they did not get a "Fair and Reasonable" opinion from the IFA, which is one of the requirements for delisting. Also, they did not avail themselves for compulsory acquisition.

Hope that the above clarifies.

[YWT]

Do the listing rules prohibit Boustead Projects from revising the offer price to a higher price at this point in time? 

Should Boustead Projects cross the 90% threshold, and if they decline to comply with SGX's requirement to increase the free float back to above 10%, does SGX have any levers to force them to comply (aside from delisitng)?

[ksir]

Hi setan,

I think I have explained on post #286 of this topic on the options that the offeror have if this GO to delist Boustead Projects failed. Please refer back as I do not wish to repeat myself again.

As for suspension, it won't be forever. Either they restore the free float back to the listing requirements, or they would be directed to delist. As long as you are listed, you will have to pay listing fees.

The offer will not lapse as it is already unconditional. So, shareholders who accepted the offer will be paid accordingly. However, delisting will not occur after this offer closes as they did not get a "Fair and Reasonable" opinion from the IFA, which is one of the requirements for delisting. Also, they did not avail themselves for compulsory acquisition.

Hope that the above clarifies.

Hi ghchua,

Do I understand correctly that:
BP can't delist now but they can be suspended then directed to delist later? 
Isn't this like (sorry, for lack of better term) LPPL!!!

[ghchua]

Hi YWT,

Do the listing rules prohibit Boustead Projects from revising the offer price to a higher price at this point in time? 

The problem is that the offeror had already declared the offer price as the final offer price. Therefore, no revision is allowed.

Should Boustead Projects cross the 90% threshold, and if they decline to comply with SGX's requirement to increase the free float back to above 10%, does SGX have any levers to force them to comply (aside from delisitng)?

If they decline to comply with listing rules, then delisting is the only option. Just like a soccer player who do not wish to comply with the rules on the field and commit several fouls, sending him off the field is the only option to continue playing the game.

[ghchua]

Hi ghchua,

Do I understand correctly that:
BP can't delist now but they can be suspended then directed to delist later? 
Isn't this like (sorry, for lack of better term) LPPL!!!

Hi ksir,

BP can't delist now because they did not meet one of the requirements for delisting, which is to obtain a "Fair and Reasonable" opinion from the IFA.

Yes, they might be directed to delist later, if they refuses to comply with free float requirements for listing after suspension. But then again, they have to give a delisting exit offer that is deemed "Fair and Reasonable". The exit offer might not be the same as the current GO offer price. So, its not LPPL as what you have stated.

[ksir]

Hi ghchua,

Do I understand correctly that:
BP can't delist now but they can be suspended then directed to delist later? 
Isn't this like (sorry, for lack of better term) LPPL!!!

Hi ksir,

BP can't delist now because they did not meet one of the requirements for delisting, which is to obtain a "Fair and Reasonable" opinion from the IFA.

Yes, they might be directed to delist later, if they refuses to comply with free float requirements for listing after suspension. But then again, they have to give a delisting exit offer that is deemed "Fair and Reasonable". The exit offer might not be the same as the current GO offer price. So, its not LPPL as what you have stated.

Well noted, thanks ghchua.

[setan]

Hi ghchua,

Do I understand correctly that:
BP can't delist now but they can be suspended then directed to delist later? 
Isn't this like (sorry, for lack of better term) LPPL!!!

Hi ksir,

BP can't delist now because they did not meet one of the requirements for delisting, which is to obtain a "Fair and Reasonable" opinion from the IFA.

Yes, they might be directed to delist later, if they refuses to comply with free float requirements for listing after suspension. But then again, they have to give a delisting exit offer that is deemed "Fair and Reasonable". The exit offer might not be the same as the current GO offer price. So, its not LPPL as what you have stated.

Hi GH Chua,

Thank you for your valued contribution.

I went to read SGX-ST listing rule - Mainboard on "Chapter 13  Part III - Suspension of Trading" Rule 1303 & 1304. It stated as below :

Rule 1303


The Exchange may at any time suspend trading of the listed securities of an issuer in any of the following circumstances:—

(1) If the percentage of an issuer's total number of issued shares excluding treasury shares held in public hands falls below 10%, as provided in Rule 723. In a take-over situation, where the Offeror succeeds in garnering acceptances exceeding 90% of the issuer's total number of issued shares excluding treasury shares, thus causing the percentage of an issuer's total number of issued shares excluding treasury shares held in public hands to fall below 10%, the Exchange will suspend trading of the listed securities of the issuer only at the close of the take-over offer;
(2) Where there is a change in the issuer's assets that produces a situation where its assets consist wholly or substantially of cash or short-dated securities, as provided in Rule 1018;
(3) Where the issuer is unable to continue as a going concern or unable to demonstrate to the Exchange and its shareholders that it is able to do so, including the following circumstances:
(a) when an application is filed with a court to place the issuer (or significant subsidiary) under judicial management; or
(b) when an application is filed with a court for the liquidation of the issuer (or significant subsidiary) and the amount of the debt alleged is significant; or
© when the issuer is unable to reasonably assess its financial position and inform the market accordingly.
(4) Where the issuer is unable or unwilling to comply with, or contravenes, a listing rule;
(5) Where, in the opinion of the Exchange, it is necessary or expedient in the interest of maintaining a fair, orderly and transparent market;
(6) Where, in the opinion of the Exchange, it is appropriate to do so; or
(7) Where the Exchange releases an announcement in relation to the issuer which, in the opinion of the Exchange, is market sensitive

Rule 1304


If the trading of the listed securities of an issuer is suspended under Rule 1303(3), it must:—

(1) submit a proposal (or proposals) to the Exchange with a view to resuming trading in its securities ("resumption proposals") within 12 months of the date of suspension. If no resumption proposals are received to enable trading to resume within 12 months of the date of suspension, the Exchange may remove the issuer from the Official List; and
(2) implement the resumption proposals within 6 months from the date the Exchange indicates that it has no objection to the resumption proposals. If the resumption proposals have not been implemented within the 6 months, the Exchange may remove the issuer from the Official List. The issuer is expected to provide monthly valuation of its assets and utilisation of cash and updates of milestones in completing the relevant transactions to the market via SGXNET.

So for Boustead Project scenerio, it will most slightly suspended under loss of free float ie. less than 10% of the shares hold by public hand based on the acceptance rate @ 16 Mar 2023 is approximately 89.73%.

With Rule 1304, if minority shareholders reject the offer, they need to prepare to wait for 12 months for a resolution. Am I right?

[ghchua]

With Rule 1304, if minority shareholders reject the offer, they need to prepare to wait for 12 months for a resolution. Am I right?

Hi setan,

Not really. The company can initiate a voluntary delisting process before the deadline. Please refer back to post #286 of this topic again, which I have re-produced the offeror announcement on their plans if they could not secure a delisting after this GO closes.

There is no resolution to this deadlock actually, since the company already said that they are not going to increase the free float to meet listing requirements after this offer closes. And SGX is not going to allow a listed company to be suspended from trading forever.

[dreamybear]

Thanks to ghchua for all his replies to help VB.

Maybe I can summarize based on his #286 post based on my understanding :
For delisting via General Offer / voluntary delisting, the IFA opinion needs to be "Fair and Reasonable" which doesn't apply in Boustead Projects(BP) case. 

Hence, the shares may be heading towards an unknown period of suspension for shareholders who do not accept. Based on the earlier VB discussions, BP cld be directed to delist in the future if the free float requirements is continually not met. 

The BT article below summarizes the current situation.

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Boustead Projects says there may not be a public market for its shares after S$0.95 offer closes
UPDATED THU, MAR 16, 2023 - 9:33 AM
https://www.businesstimes.com.sg/compani...s095-offer
".... Boustead Projects said that it was already set out in the independent financial adviser’s (IFA) letter that shareholders who do not accept the offer will hold shares in the company, which may be suspended from trading on the SGX-ST.....

....Boustead Projects also pointed out that any proposal involving the issuance of new shares will require the offeror to vote in favour of the relevant resolutions, and this is not within the control of the company or the board....

....Existing rules regarding delisting include the requirement that the deal’s IFA opines that the exit offer is both fair and reasonable, but the appointed IFA in this case has deemed the offer “not fair” but reasonable....

...It added that since the company had received no alternative offer or proposal, it is unable to provide other options to shareholders who do not accept the offer...."

[setan]

With Rule 1304, if minority shareholders reject the offer, they need to prepare to wait for 12 months for a resolution. Am I right?

Hi setan,

Not really. The company can initiate a voluntary delisting process before the deadline. Please refer back to post #286 of this topic again, which I have re-produced the offeror announcement on their plans if they could not secure a delisting after this GO closes.

There is no resolution to this deadlock actually, since the company already said that they are not going to increase the free float to meet listing requirements after this offer closes. And SGX is not going to allow a listed company to be suspended from trading forever.

Hi GH,

So you are saying that Boustead Project still can seek a voluntary delisting under SGX-ST listing Rule 1307 as below :

The Exchange may agree to an application by an issuer to delist from the Exchange if:

(1) the issuer convenes a general meeting to obtain shareholder approval for the delisting; and
(2) the resolution to delist the issuer has been approved by a majority of at least 75% of the issuer's total number of issued shares excluding treasury shares and subsidiary holdings held by the shareholders present and voting, on a poll, either in person or by proxy at the meeting. The Offeror Concert Party Group must abstain from voting on the resolution.

Fully understand now. Thanks.