Green Esteel Pte. Ltd. (the Offeror) has made a mandatory conditional general cash offer to acquire all issued ordinary shares (excluding treasury shares) of HG Metal Manufacturing Limited (“HG Metal”). This offer follows the Offeror’s increased holdings in HG Metal through its participation in the renounceable Rights Issue, which resulted in its stake surpassing the 30% threshold mandated for a general offer under the Singapore Code on Take-overs and Mergers.

Offer Highlights

• Offer Price: The Offeror is offering S\$0.266 in cash for each HG Metal share. This price is final unless a competitive situation arises.
• Current Holdings: The Offeror and its concert parties currently hold 122,090,426 shares, representing approximately 44.44% of HG Metal’s total issued shares (excluding treasury shares).
• Key Dates: The offer closes on 3 February 2025 at 5:30 PM Singapore time. Shareholders are urged to act promptly as no extensions are anticipated.
• Conditions: The offer is subject to a minimum acceptance condition of 50% plus one share of the total issued shares not already owned by the Offeror and its concert parties.

Potential Impact on HG Metal’s Listing Status

The Offeror has stated its intention to preserve HG Metal’s listing status on the Mainboard of the Singapore Exchange (SGX-ST). However, if the public float falls below 10%, the SGX-ST may suspend trading in the shares. Should this suspension occur, the Offeror may re-evaluate its position and could opt for compulsory acquisition under Section 215 of the Companies Act if it garners more than 90% of total issued shares.

Financial Aspects and Shareholder Considerations

The offer price of S\$0.266 represents a slight premium of 0.4% over the last transacted price of S\$0.265 on 13 December 2024 but reflects a discount when compared to historical prices, including a 12.8% discount to the S\$0.305 price on 7 October 2024, the last trading day before the Rights Issue announcement. Shareholders should consider the following:

• Market Premiums: The offer price is lower than the three- and six-month volume-weighted average prices (VWAP) of S\$0.313 and S\$0.307, respectively.
• Dividends: Shareholders accepting the offer will forfeit any rights to distributions declared after the offer announcement date.
• Compulsory Acquisition: If the Offeror secures 90% of shares, dissenting shareholders may have their shares forcibly acquired at the offer price.

Procedures for Acceptance

Shareholders can accept the offer by submitting the relevant Form of Acceptance and Authorisation (FAA) or Form of Acceptance and Transfer (FAT) by the stipulated deadline. Those holding shares in scrip form must submit their share certificates alongside the FAT. Shareholders are advised to ensure documentation is complete to avoid rejection.

Key Financials of Green Esteel

Green Esteel reported the following financial performance for the fiscal year ending 30 September 2023:

• Revenue: US\$1,516.55 million
• Profit After Tax: US\$73.08 million
• Total Assets: US\$1,332.82 million
• Equity Attributable to Owners: US\$690.13 million

These figures highlight the Offeror’s financial capacity to complete the transaction.

What Shareholders Should Do

Shareholders are advised to carefully review the offer terms and seek independent financial advice if uncertain. The independent directors of HG Metal, along with their appointed financial adviser, Xandar Capital Pte. Ltd., will provide their recommendation within 14 days of the offer document’s electronic dispatch on 6 January 2025. Shareholders should consider this recommendation before making a decision.