Dutech Holdings

[Yoyo]

Received an email:
Dear shareholder
Based on the latest list of shareholders of the Company, you did NOT accept the VOLUNTARY UNCONDITIONAL CASH OFFER (“Offer”), which was announced on 31th May 2021.

In this regard, the Offeror's financial adviser, UOB KAY HIAN PRIVATE LIMITED (“UOBKH”) would like to have a communication with you mainly to understand the reason why you did not accept the Offer.

What is the rationale of this conversation since the offer price is final?

I have some shares using CPF fund. Anyone can advise the what to expect, should Dutech got delisted? Does the share certificate bear my name? Do I have to compensate CPF? In the event of delist exit offer, the proceed goes to me or CPF? Thanks in advance.

[ghchua]

What is the rationale of this conversation since the offer price is final?

Simple. To reach out to as many minority shareholders as possible so as to attain 90% acceptance level, so that they can compulsory acquire all the remaining shares out there, including Droege Group (8.8%) block. Yes, the offer price is final, but some shareholders might still be holding out or unsure. By not submitting their offer acceptance, they are included in the "reject the offer" block.

I have some shares using CPF fund. Anyone can advise the what to expect, should Dutech got delisted?

Your shares bought under CPF Investment Scheme is held under your nominee CPF agent bank, which you are the beneficiary owner. In the event that Dutech had been delisted without an exit offer, your nominee CPF agent bank will hold onto those physical share certificate on your behalf.

Does the share certificate bear my name?

The share certificate will not be sent to you since you are just a beneficiary owner. It will be held in custodian with your nominee CPF agent bank under their name, with you as a beneficiary owner.

Do I have to compensate CPF?

You do not need to pay CPF agent bank for that, but one downside would be you are stuck with an unlisted company and you have to continue to pay them quarterly fees just like any other stock in your CPF Investment portfolio.

In the event of delist exit offer, the proceed goes to me or CPF?

It goes to your CPF Investment Account with your CPF agent bank. If there is no activity after sometime, it will be transferred back automatically to your CPF OA.

[angelzsoul]

Hi angelzsoul,

1. So for this company, how likely will be the stock be suspended going forward?

Very likely, since the free float stands at around 5%+ since the last update from the company.

==> does this means suspension of the stock is based on SGX discretion?
Or SGX will suspend it if Dutech request it?

Normally, company will request for suspension if the free float requirement is not met. SGX could also suspend the stock too.

2. Lets say minority shareholders reject this offer, and letting it lapse, share price drops back to ~ 0.28.
With >75% shareholding by those concerted parties, can I say if they want to "screw" us, they can do it easily?

eg) Lesser or NIL dividend going forward, higher remuneration for their directors,
slowly do Share Buyback at <1% (even if they have do a mandatory offer, they can always offer say $0.30 and slowly buy up)

With suspension the most likely scenario, I think what you have mentioned here might not happen. If a stock is suspended, they would not be able to do any share buyback at all. Also, do take note that there are independent directors on board to look after the interest of all shareholders. There are also two representatives on board from Droege Group, and you can be sure that they are also looking at the cash holdings of the company and pushing for higher dividend payout going forward.

Thanks ghchua for your reply!

I think it's quite a risky to continue playing this game (at least for me) because there may be 101 ways to "screw" us.

Like what you have said having 2 board rep from Droege Group, they are able to look after the interest of those who still hold on to the shares.

But what if Dutech decide to have share options scheme and scrip dividend (I don't think retail investors will want to get their dividend in shares if the stock is suspended right? lol )

At the end of the day, I guess it need to depend on whether the Company still want to practise good coporate governance after suspending their shares.

[ghchua]

But what if Dutech decide to have share options scheme and scrip dividend (I don't think retail investors will want to get their dividend in shares if the stock is suspended right? lol )

One cannot just anyhow issue share options to reward themselves. They have to get approval via the Remuneration Committee within the board committees. For your information, Remuneration Committee of Dutech consists of only independent directors and one representative from Droege Group.

Dutech does not have a scrip dividend scheme in place. They cannot just anyhow issue scrip dividend unless they obtained shareholders approval. 

At the end of the day, I guess it need to depend on whether the Company still want to practise good coporate governance after suspending their shares.

A company that is listed on SGX (even if it is suspended) will have to abide by SGX listing rules. This includes having a corporate governance report in the annual report, detailing its corporate governance practices with specific reference to the principles and provisions as set out in the Code of Corporate Governance. Where the Company’s practices differ from the provisions under the Code, they have to explain the reasons for deviation. It is not a matter of whether, but it is a matter of having to play by the rules.

[RC22SG]

Any fellow Dutech investors plan to continue holding onto their shares to block major shareholders from achieving 90%?

[dydx]

Received an email:
Dear shareholder
Based on the latest list of shareholders of the Company, you did NOT accept the VOLUNTARY UNCONDITIONAL CASH OFFER (“Offer”), which was announced on 31th May 2021.

In this regard, the Offeror's financial adviser, UOB KAY HIAN PRIVATE LIMITED (“UOBKH”) would like to have a communication with you mainly to understand the reason why you did not accept the Offer.

What is the rationale of this conversation since the offer price is final?

I have some shares using CPF fund. Anyone can advise the what to expect, should Dutech got delisted? Does the share certificate bear my name? Do I have to compensate CPF? In the event of delist exit offer, the proceed goes to me or CPF? Thanks in advance.

It looks like as the financial adviser UOB Kay Hian is trying all out to persuade those remaining minority shareholders to accept, and this is an indication that the Offeror is getting anxious as the deadline under the 60-day Final Day Rule is getting closer.

[RC22SG]

Received an email:
Dear shareholder
Based on the latest list of shareholders of the Company, you did NOT accept the VOLUNTARY UNCONDITIONAL CASH OFFER (“Offer”), which was announced on 31th May 2021.

In this regard, the Offeror's financial adviser, UOB KAY HIAN PRIVATE LIMITED (“UOBKH”) would like to have a communication with you mainly to understand the reason why you did not accept the Offer.

What is the rationale of this conversation since the offer price is final?

I have some shares using CPF fund. Anyone can advise the what to expect, should Dutech got delisted? Does the share certificate bear my name? Do I have to compensate CPF? In the event of delist exit offer, the proceed goes to me or CPF? Thanks in advance.

It looks like as the financial adviser UOB Kay Hian is trying all out to persuade those remaining minority shareholders to accept, and this is an indication that the Offeror is getting anxious as the deadline under the 60-day Final Day Rule is getting closer.

Deadline just got extended again to 16 Aug.

[touzi]

Did anybody receive calls asking why you are not accepting the offer? And what price are you willing to accept?

[sgmystique]

Did anybody receive calls asking why you are not accepting the offer? And what price are you willing to accept?

I did get a call from B.A.C.S. Pte Ltd asking if I had accepted the offer. However, I am very surprised if you were asked "what price are you willing to accept?"

[touzi]

Did anybody receive calls asking why you are not accepting the offer? And what price are you willing to accept?

I did get a call from B.A.C.S. Pte Ltd asking if I had accepted the offer. However, I am very surprised if you were asked "what price are you willing to accept?"

I was surprised too. The whole conversation was strange and I don't even own many shares.