Kuok Group to take S’pore-listed POSH private at 21.5 cents

This article first appeared in The Edge Financial Daily, on November 5, 2019.
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KUALA LUMPUR: The Kuok Group, through its investment vehicle Quetzal Capital Pte Ltd, announced a voluntary conditional cash offer of S$0.215 (66 sen) per share to buy out Singapore-listed PACC Offshore Services Holdings Ltd (POSH).

Quetzal Capital is the bid vehicle formed by certain members of the Kuok Group of companies (the Kuok Group), namely Kuok (Singapore) Ltd (KSL), Trendfield Inc, a wholly-owned subsidiary of Kuok Brothers Sdn Bhd and Merry Voyage Ltd, a wholly-owned subsidiary of Kerry Holdings Ltd.

The offer price of 21.5 Singapore cents per share is almost double the last traded price of 12.7 Singapore cents on Oct 31.

To recap, in 2008, Bursa Malaysia-listed Malaysian Bulk Carriers Bhd (Maybulk) paid US$6.50 per share or a total of US$221 million to buy 34 million shares in POSH. The purchase consideration was satisfied by US$197 million cash and transfer of an offshore accommodation vessel at the valuation of US$24 million.

A decade later, in May last year, Maybulk, another member of Kuok Group, disposed of its 21.37% stake in POSH through a renounceable restricted offer for sale to its shareholders on the basis of 386 POSH shares for every 1,000 shares in Maybulk at 65 sen per share — about the same as the offer price of 21.5 Singapore cents.

The offer price represents a premium of approximately 109.8%, 96.2%, 69.6% and 35.3% over the one-month, three-month, six-month and twelve-month volume-weighted average prices respectively, POSH said in a statement.

“The offer price is final and the offeror does not intend to revise the offer price,” said POSH, whose share price has been on the downhill since it was listed in 2014.

POSH, which specialises in providing offshore marine transportation services to the oil and gas (O&G) industry, noted that the offer presents shareholders with a unique cash exit opportunity to realise their entire investment in POSH at an attractive premium, as it may be difficult for shareholders to exit due to the share’s low trading liquidity.

This offer is in view of the continuing challenges in the global offshore O&G sector, as it believes that privatising POSH will provide it with more flexibility to manage POSH’s operational and funding requirements, and also optimise the use of POSH’s resources, said the company.

The offeror has secured irrevocable undertakings in respect of approximately 75.03% of shares in issue, from KSL and KSL’s wholly-owned subsidiary, Camsward Pte Ltd (Camsward), said POSH.

Oversea-Chinese Banking Corp Ltd is the financial adviser to Quetzal Capital in connection with the offer.