Boustead Projects

[header]

Actually in this case, Mr FF Wong himself has not agreed to sell BP shares to BSL. So we as minority shareholders should stay aligned with him and not sell the shares too?
Further, BSL is listed and we can monitor the results of BP through there. So even if BP is not longer listed/ trading suspended, our interest will continue to be some what protected as BSL is listed....

[ghchua]

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.

Hi setan,

You have missed out another important requirement for voluntary delisting. Which is, the exit offer must be deemed "Fair and Reasonable" by the IFA too.

Please refer to the link below:
https://www.sgxgroup.com/media-centre/20...older-vote

[ghchua]

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. 

Hi dreamybear,

The period of suspension is not indefinitely or unknown. There is a deadline to restore the free float to meet SGX listing requirements, failing which the company will be directed to delist. Also, the company can seek voluntary delisting.

Please refer to my exchanges here with setan for more details.

[ghchua]

Actually in this case, Mr FF Wong himself has not agreed to sell BP shares to BSL.  So we as minority shareholders should stay aligned with him and not sell the shares too?
Further, BSL is listed and we can monitor the results of BP through there.  So even if BP is not longer listed/ trading suspended, our interest will continue to be some what protected as BSL is listed....

Hi header,

I think there is a difference between a suspended listed company and an unlisted company. We should be careful not to lump both of them together here.

For the former, I am not worried about holding onto it as I am protected by listing rules, although the company is suspended. Listing rules applies to all listed companies, whether they are traded, halted or suspended. Corporate governance guidelines applies, which means they got to have independent directors on board, report results half yearly etc. Please refer to the Code of Corporate Governance for listed companies for more details.

For the latter, this is the tricky part. As you might know, an unlisted company no longer needs to follow listing rules. Most likely, they also would not be following Code of Corporate Governance for listed companies as well. Holder of shares in an unlisted company will only be protected by Companies Act, which depends on the country of incorporation of the company. Singapore Companies Act apply for BP since it is incorporated in Singapore. Which is to me, minimum protection. The question is really whether you can trust the controlling shareholder of an unlisted company and continue to invest with them? Your interest is not protected just because the controlling shareholder is listed. The controlling shareholder have to protect their own interest as well, and their interest should be to buyout subsidaries as cheap as possible if they can to book negative goodwill profits. Their aim is to maximize returns for BSL Group shareholders and not BP shareholders.

For clarification, there is no need to monitor BP results when it is unlisted via listed BSL. As a public company shareholder under the Singapore Companies Act, you will be provided with a set of annual audited accounts even if the company is unlisted.

I will not comment whether it is worthwhile to hold shares of unlisted companies as it depends on each individual and their risk appetite. What I want to say here is go in with your eyes open, knowing the rules, the protection you have in place and most importantly, whether you can trust the controlling shareholder of an unlisted company. And of course, having a group of shareholders working together and in contact with each other in an unlisted company helps, just in case you want to launch an activist effort together.

[header]

Tks ghchua. If we are talking about minority shareholders protection from listed rules,we should take comfort the acquirer here, BSL, is a listed company. The listing rules applies to the whole Group which BP is part of it. So I am less worried here.

[header]

If I am right, only FF Wong is acting in concert with BSL on the GO? His sons have been tendered their shares in BP? Or are they also acting in concert with their father?

[ghchua]

If I am right, only FF Wong is acting in concert with BSL on the GO? His sons have been tendered their shares in BP? Or are they also acting in concert with their father?

No. His son is also considered concerted parties. Therefore, the offer is not extended to him.

Mr. Wong Yu Wei (Huang Youwei) is the son of FF Wong, a director and substantial shareholder of the Offeror. Accordingly, Mr. Wong Yu Wei (Huang Youwei) is presumed to be acting in concert with the Offeror. As set out in Section 2.1 of this Circular, the Offer is not extended to Shares already owned by the parties acting in concert with the Offeror as at the date of the Offer. Accordingly, the Offer does not extend to the Shares held directly or indirectly by Mr. Wong Yu Wei (Huang Youwei).

[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. 

Hi dreamybear,

The period of suspension is not indefinitely or unknown. There is a deadline to restore the free float to meet SGX listing requirements, failing which the company will be directed to delist. Also, the company can seek voluntary delisting.

Please refer to my exchanges here with setan for more details.

Well, if I read the doc, it states that a longer period (undefined) is possible ....

https://links.sgx.com/FileOpen/BP-Announ...eID=750338   (emphasis added)
"...Under Rule 724(1) of the Listing Manual, if the percentage of Shares held in public hands falls below 10%, the Company must, as soon as practicable, announce that fact, and the SGX-ST may suspend the trading of the Shares. In addition, Rule 724(2) of the Listing Manual provides that the SGX-ST may allow the Company a period of three (3) months, or such longer period as the SGX-ST may agree, to raise the percentage of Shares in public hands to at least 10%, failing which the Company may be removed from the official list of the SGX-ST..." 

-----------

There's an announcement by RegCo today :

https://links.sgx.com/FileOpen/20230322%...eID=750627
"SGX RegCo issues response to queries on offer for Boustead Projects 

In response to queries on the offer for Boustead Projects, Singapore Exchange Regulation (SGX RegCo) would like to re-iterate the position set out in our 11 July 2019 Regulator’s Column on “Privatisations through general offers” and our 11 March 2023 reply to Business Times. 

If free float is lost during an offer, the offeree company’s (“the company”) securities will be suspended at the close of the offer. Thereafter, the company is obliged to restore free float, failing which SGX RegCo may direct the company to delist and provide an exit offer in compliance with the Listing Rules on Delisting. The independent financial adviser must opine that the exit offer is both fair and reasonable."

[ghchua]

Well, if I read the doc, it states that a longer period (undefined) is possible ....

https://links.sgx.com/FileOpen/BP-Announ...eID=750338   (emphasis added)
"...Under Rule 724(1) of the Listing Manual, if the percentage of Shares held in public hands falls below 10%, the Company must, as soon as practicable, announce that fact, and the SGX-ST may suspend the trading of the Shares. In addition, Rule 724(2) of the Listing Manual provides that the SGX-ST may allow the Company a period of three (3) months, or such longer period as the SGX-ST may agree, to raise the percentage of Shares in public hands to at least 10%, failing which the Company may be removed from the official list of the SGX-ST..." 

My question would be - Why would SGX want to give them more time to raise the free float back to at least 10%, when the company already said they are not going to do so?

[Shiyi]

The offeror has stated that it cannot embark on compulsory acquisition as it is mandatory unconditional general offer.
Is there such a rule?