Pan Ocean Co., Ltd. (the “Company”) proposes to seek the voluntary delisting (the “Delisting”) of its issued ordinary shares in the capital of the Company (the “Shares”) from the Official List of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) pursuant to Rules 1307 and 1309 of the listing manual of the SGX-ST (the “Listing Manual”). The Company (a) will make an application to the SGX-ST for the Delisting and (b) subject to the approval of the SGX-ST, will convene an extraordinary general meeting of the Company (“EGM”) to seek the approval of the shareholders of the Company (the “Shareholders”) for the Delisting pursuant to Rules 1307 and 1309 of the Listing Manual.
In connection with the Delisting, RHT Capital Pte. Ltd. (“RHTC”) intends to make, for and on behalf of Harim Holdings Co., Ltd. (the “Offeror”), a conditional cash exit offer (the “Exit Offer”) for all the Shares which are registered on the register of shareholders in Singapore (the “Singapore Branch Register”), up to a maximum of 206,896 Shares (the “Maximum Quantity”) from the shareholders of the Company who are registered as holders of such Shares on the Singapore Branch Register (the “Singapore Registered Shareholders”). For the avoidance of doubt, the Exit Offer will not be extended to the shareholders of the Company whose Shares are registered on the Company’s principal register of shareholders in the Republic of Korea (the “Korea Register”, and such shareholders, the “Korea Registered Shareholders”).
The Delisting is subject to the approval of the SGX-ST and both the Delisting and the Exit Offer will be conditional on the obtaining of Shareholders’ Approval (as defined in paragraph 2.1 below).
The Delisting is not a privatisation exercise and the Company intends to maintain its primary listing on the Korea Exchange (“KRX”), and the Singapore Registered Shareholders who wish to trade their Shares on the KRX subsequent to the completion of the Delisting can elect to have their Shares transferred from the Singapore Branch Register to the Korea Register. Further details of the relevant procedures for transferring Shares from the Singapore Branch Register to the Korea Register will be set out in the circular to be issued by the Company in connection with the Delisting (the “Delisting Circular”).
Singapore Registered Shareholders who do not wish to trade on the KRX may tender their Shares in acceptance of the Exit Offer. Further details on the Exit Offer will be set out in the exit offer letter (the “Exit Offer Letter”) to be issued by the Offeror to the Shareholders containing, inter alia, the terms of the Exit Offer, procedures for acceptance of the Exit Offer and the relevant acceptance form(s) accompanying the Exit Offer Letter.
The Delisting will not result in any right of compulsory acquisition or squeeze-out of any minority Shareholders.
RHTC has been appointed as financial adviser to the Offeror in respect of the Delisting and the Exit Offer.
LISTING MANUAL PROVISIONS PERTAINING TO THE DELISTING
Under Rule 1307 of the Listing Manual, the SGX-ST may agree to an application by the Company to delist from the Official List of the SGX-ST if:
a) the Company convenes an EGM to obtain Shareholders’ approval for the Delisting; and
b) the resolution to approve the Delisting has been approved by a majority of at least 75% of the total number of issued Shares (excluding treasury shares and subsidiary holdings)1 held by Shareholders present and voting, on a poll, either in person or by proxy at the EGM. The Offeror and parties acting in concert with it must abstain from voting on the resolution,
(collectively, the “Shareholders’ Approval”).
In addition, under Rule 1309 of the Listing Manual, if the Company is seeking to delist from the SGX- ST:
a) an exit offer must be made to the Company’s shareholders and holders of any other classes of listed securities to be delisted. The exit offer must:
(i) be fair and reasonable; and
(ii) include a cash alternative as the default alternative; and
b) (b) the Company must appoint an independent financial adviser (“IFA”) to advise on the exit offer and the IFA must opine that the exit offer is fair and reasonable.
TERMS OF THE EXIT OFFER
Offer Shares and Offer Shareholders
The Exit Offer will be extended to all the Shares which are registered on the Singapore Branch Register, up to the Maximum Quantity of 206,896 Shares (the “Offer Shares”) and to the Singapore Registered Shareholders who hold such Offer Shares.
As at the date of this Joint Announcement (the “Joint Announcement Date”), 170,597 Shares (representing approximately 0.03% of the total number of issued Shares) are registered on the Singapore Branch Register and held by the Singapore Registered Shareholders.
For the avoidance of doubt, the Exit Offer will not be extended to those Shares which are registered on the Korea Register and the Korea Registered Shareholders who hold such Shares.
Exit Offer Price
The offer price for each Offer Share will be S$8.70 in cash (the “Exit Offer Price”).
Subject to the Maximum Quantity of Offer Shares, the Exit Offer Price shall be applicable to the Offer Shares that are tendered in acceptance of the Exit Offer.
The Offer Shares will be acquired fully paid and free from all liens, equities, mortgages, charges, encumbrances, rights of pre-emption and other third party rights and interests of any nature whatsoever (“Encumbrances”), and together with all rights, benefits and entitlements attached thereto as at the Joint Announcement Date and thereafter attaching thereto (including the right to receive and retain all dividends, return of capital and other distributions, if any, which may be announced, declared, paid or made thereon by the Company on or after the Joint Announcement Date).
1 In this Joint Announcement, unless otherwise stated, all references to the total number of issued Shares shall be to 534,569,512 Shares.
Further details on the Exit Offer will be set out in the Exit Offer Letter to be issued by the Offeror to the Shareholders containing, inter alia, the terms of the Exit Offer, procedures for acceptance of the Exit Offer and the relevant acceptance form(s) accompanying the Exit Offer Letter.
Conditions
The Delisting and the Exit Offer will be conditional on Shareholders’ Approval being obtained.
For the avoidance of doubt, there will not be any revision to the Exit Offer Price for each Offer Share, and the Delisting and the Exit Offer will not be conditional upon a minimum number of acceptances being received by the Offeror.
The Company will make an application to the SGX-ST for the Delisting, and subject to the approval of the SGX-ST, will convene an EGM to seek the approval of the Shareholders for the Delisting pursuant to Rules 1307 and 1309 of the Listing Manual.
Duration
It is intended that the Exit Offer Letter and the relevant acceptance form(s) will be despatched to Shareholders on the same day as the Delisting Circular containing, inter alia, further information on the terms and conditions of the Exit Offer.
Copies of the Delisting Circular and the Exit Offer Letter will be electronically dispatched and published on the website of the SGX-ST at https://www.sgx.com in due course. In connection with the electronic despatch of the Delisting Circular and the Exit Offer Letter, a hardcopy notification containing instructions on how to access the electronic copies of the Delisting Circular and the Exit Offer Letter, together with the hardcopy form(s) of acceptance of the Exit Offer, will be despatched to the Singapore Registered Shareholders in due course.
The Exit Offer will be open for acceptance by the Singapore Registered Shareholders from the date of the electronic despatch of the Delisting Circular and the Exit Offer Letter and will remain open for a period of 14 days after the date of the announcement of Shareholders’ Approval being obtained (the “Closing Date”).
Acceptances
The Singapore Registered Shareholders may choose to accept the Exit Offer in respect of all or part of their holdings of Offer Shares. The Singapore Registered Shareholders may choose to accept the Exit Offer before the EGM. However, such acceptances would be conditional and if the Shareholders’ Approval is not obtained at the EGM, the condition to the Exit Offer will not be fulfilled and the Exit Offer will lapse.
Meeting of Acceptances by Offeror
Under the terms of the Exit Offer, the Offeror will acquire the Shares which are registered on the Singapore Branch Register, up to the Maximum Quantity of Offer Shares (as stated in paragraphs 1.2 and 3.1 above). In the event the aggregate number of Shares tendered by the Singapore Registered Shareholders in acceptance under the Exit Offer exceeds the Maximum Quantity, the Shares tendered by the Singapore Registered Shareholders will be accepted on a pro-rata basis up to the Maximum Quantity of Offer Shares (the “Scale-Back”) (but in a manner which minimises the number of new odd- lot shareholdings as the Offeror may in its absolute discretion deem fit in the interest of the Offeror). If the Scale-Back applies, the number of Shares tendered by each Singapore Registered Shareholder in acceptance of the Exit Offer which will be accepted by the Offeror, will be calculated based on the following formula:
A × 𝐵/𝐶
Where:
(i) ‘A’ is the number of Shares tendered by a Singapore Registered Shareholder in acceptance of the Exit Offer;
(ii) ‘B’ is the Maximum Quantity of Offer Shares; and
(iii) ‘C’ is the total number of Shares tendered in acceptance of the Exit Offer.
Singapore Registered Shareholders who continue to hold any Shares following the Closing Date can elect to have their Shares transferred to the Korea Register to trade their Shares on the KRX. Further details of the relevant procedures will be set out in the Delisting Circular.
Warranty
Acceptance of the Exit Offer by a Singapore Registered Shareholder will be deemed to constitute an unconditional and irrevocable warranty by that Singapore Registered Shareholder that each Share in respect of which the Exit Offer is accepted is sold by him as, or on behalf of, the beneficial owner(s) thereof, fully paid and free from all Encumbrances, and together with all rights, benefits and entitlements attached thereto as at the Joint Announcement Date and thereafter attaching thereto (including the right to receive and retain all dividends, return of capital and other distributions, if any, which may be announced, declared, paid or made thereon by the Company on or after the Joint Announcement Date).
Others
As the Company is a secondary listed company on the SGX-ST, the Singapore Code on Take-overs and Mergers will not apply to the Company in respect of the Delisting and the Exit Offer.
RATIONALE FOR DELISTING AND EXIT OFFER
Compliance Costs of Maintaining Secondary Listing on the SGX-ST. In maintaining the Company’s dual listing status, the Company incurs various compliance and associated costs. The Delisting, if approved, will allow the Company to focus its resources on its business operations. KRX is also geographically more aligned with the Company’s business operations and core business competencies (which are based in the Republic of Korea).
Low Trading Liquidity. As at the Joint Announcement Date, 534,398,915 Shares (representing approximately 99.97% of the total number of issued Shares) are trading on the KRX, and 170,597 Shares (representing approximately 0.03% of the total number of issued Shares) are trading on the SGX-ST.
The trading liquidity of the Shares on the SGX-ST in the past year has been generally thin. The average daily trading volume of the Shares trading on the SGX-ST for the one (1)-month, three (3)-month, six (6)-month and twelve (12)-month periods prior to and including 10 May 2021, being the last full Market Day(1) on which the Shares were transacted prior to the Joint Announcement Date (the “Last Trading Day”) are set out below:
Source: Pan Ocean Co., Ltd.
(1) “Market Day” refers to a day on which the SGX-ST is open for the trading of securities.
(2) The average daily trading volume is computed based on the total trading volume of the Shares for all Market Days for the relevant periods immediately prior to and including the Last Trading Day, divided by the total number of Market Days during the respective periods.
The Exit Offer will provide an exit option for those Singapore Registered Shareholders who wish to realise their entire investment in the Shares trading on the SGX-ST but find it difficult to do so as a result of the low trading liquidity of the Shares on the SGX-ST.
Opportunity to Realise Investments at a Premium. The Exit Offer Price represents a premium over the historical market prices of the Shares trading on the SGX-ST:
Source: Pan Ocean Co., Ltd.
Notes:
(1) The VWAP for the respective periods is calculated based on the total value of the Shares transacted divided by the volume of the Shares transacted as extracted from Bloomberg L.P..
(2) Rounded to the nearest three (3) decimal places.
Through the Delisting, the accepting Singapore Registered Shareholders will have an opportunity to realise their investments in the Company for a cash consideration at a premium over the market prices of the Shares traded on the SGX-ST up to and including the Last Trading Day, an option which may not otherwise be readily available due to the low trading liquidity of the Shares trading on the SGX-ST, without incurring brokerage and other trading costs.
No Need for Access to Capital Markets. In the last five (5) years, the Company has not carried out any exercise to raise cash funding on the SGX-ST. The Company is unlikely to require access to Singapore capital markets to finance its operations in the foreseeable future. Accordingly, it is no longer necessary for the Company to maintain its secondary listing on the SGX-ST.
INTENTION OF THE COMPANY TO MAINTAIN THE PRIMARY LISTING ON THE KRX
Following the completion of the Delisting, the Company intends to maintain its primary listing on the KRX. Shareholders should therefore note that the Delisting is not a privatisation exercise (and will not result in any right of compulsory acquisition or squeeze-out of any minority Shareholders), and the Shares will continue to be listed on the KRX.
Singapore Registered Shareholders who currently trade their Shares on the SGX-ST and who wish to trade their Shares on the KRX subsequent to the completion of the Delisting can elect to have their Shares transferred to the Korea Register to trade their Shares on the KRX. Further details of the relevant procedures will be set out in the Delisting Circular.
Singapore Registered Shareholders who do not take any action to accept the Exit Offer nor to transfer their Shares to the Korea Register to trade their Shares on the KRX will hold unlisted Shares in the Company following the completion of the Delisting.
Source: Hellenic Shipping
