Sin Heng Heavy Machinery Faces Delisting: A \$0.58 Cash Offer Announced

Maybank Securities Pte. Ltd. has announced a significant development for Sin Heng Heavy Machinery Limited (Sin Heng). On behalf of TAL United Pte. Ltd. (TAL United), a voluntary unconditional cash offer has been made to acquire all issued and paid-up ordinary shares in Sin Heng’s capital. This move carries substantial implications for shareholders and the company’s future listing status.

Key Offer Details:

• Offer Price: S\$0.58 per share in cash. [[2]] This price represents a premium compared to recent trading prices, ranging from 4.3% to 19.3% over various historical periods. [[7]] However, the offer price will be adjusted downwards by the amount of any distributions made by Sin Heng on or after the announcement date. [[3]] This includes proposed dividends of S\$0.05 per share for FY2024. [[2,3]]
• Irrevocable Undertakings: The Offeror has secured irrevocable undertakings from shareholders representing approximately 58.51% of Sin Heng’s total issued shares. [[4]] These undertakings include a waiver of the right to receive cash payment within the time period prescribed by Rule 30 of the Code for certain shareholders, instead receiving interest-free promissory notes. [[4]] This is a crucial detail that could significantly impact the final outcome of the offer.
• Unconditional Offer: The offer is unconditional and does not depend on any conditions being met. [[2]]
• Delisting Potential: TAL United intends to delist Sin Heng following the offer, citing potential benefits such as greater management flexibility and reduced costs associated with maintaining a listed status. [[8, 9]] This is a price-sensitive matter, as delisting would remove the shares from public trading.
• Compulsory Acquisition: If TAL United acquires 90% or more of the shares, it has the right to compulsorily acquire the remaining shares at the offer price. [[9]] Shareholders who do not accept the offer should be aware of this possibility.
• Low Trading Liquidity: Sin Heng’s shares have historically had low trading volume, making this offer a potentially attractive exit opportunity for shareholders. [[8]]
• Offeror Information: TAL United is a newly incorporated investment holding company with TALHPL and UHPL as major shareholders. [[5]] Key individuals involved include Mr. Tan Ah Lye (CEO of Sin Heng), Mr. Tan Cheng Kwong (Deputy CEO of Sin Heng), and Mr. Teo Yi-dar. The intricate relationships between these entities and Sin Heng’s existing shareholders are disclosed in the announcement. [[5,6]]
• Offer Document: The detailed Offer Document will be sent to shareholders within 14 to 21 days of the announcement date. The offer will remain open for acceptance for at least 28 days from the date of posting. [[12]]
• Overseas Shareholders: The availability of the offer to overseas shareholders may be affected by applicable laws in their jurisdictions. Overseas shareholders are advised to seek legal advice. [[12]]

Financial Aspects and Implications:

The offer price of S\$0.58 represents a premium over various historical trading prices, ranging from 5.8% to 19.3% over different periods. [[7, 10]] However, the low trading liquidity of Sin Heng’s shares [[8]] and the potential for delisting [[8, 9]] are significant factors that shareholders need to consider when evaluating the offer. The adjustment to the offer price based on future distributions is also a key detail that could impact the final amount received by shareholders. [[3]]

The significant irrevocable undertakings secured by TAL United [[4]] substantially increase the likelihood of the offer succeeding and the subsequent delisting of Sin Heng. This is a major development which has the potential to significantly impact the share price.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own thorough research and seek professional advice before making any investment decisions. The information presented here is based on the provided document and may not reflect all relevant factors.