Cosco Shipping Int'l makes voluntary cash offer for Cogent at S$1.02 per share

COSCO Shipping International on Friday made a voluntary conditional cash offer to acquire all the issued ordinary shares of Cogent Holdings Ltd for a sum of S$488.07 million.

The offer price is at S$1.02 per share, a premium of about 5.2 per cent over the last transacted price of S$0.970 per share on Nov 2. The company has no intention to revise the offer.

The aggregate number of Cogent Holdings shares held by the four undertaking shareholders - Tan Yeow Khoon; Tan Yeow Lam; Tan Min Cheow, Benson; and Ng Poh Choo - amount to 403.5 million shares, representing about 84.33 per cent of all Cogent shares in issue.

Cosco does not intend to maintain the listing status of Cogent and intends to exercise the right to compulsorily acquire, at the offer price, all the Cogent shares of shareholders who have not accepted.

The acquisition of Cogent shares will be funded by way of internal cash resources and bank borrowings. In this regard, Cosco Shipping has entered into a commitment letter for a loan facility of up to S$350 million from Bank of China to partially fund acceptances under the offer.

The rationale for the acquisition is to acquire control in one of Singapore's leading full service, integrated logistics service providers with a track record of over 40 years, said Cosco Shipping. It expects to leverage its holding company China Cosco's existing logistics business platform to potentially develop new business opportunities in the logistics sector in South-east Asia, taking advantage of the "Belt and Road Initiative". Cosco will also be able to offer end-to-end services to its customers with logistical needs in Singapore and Malaysia, said the company.

Separately, Cosco Shipping reported a net profit of S$24.8 million for the three months to September from a loss of S$102.3 million a year ago.

Revenue fell 29 per cent to S$6.99 million from S$9.9 million owing to a fall in shipping revenue from a smaller fleet of bulk carriers. Currently, the group's dry bulk shipping fleet comprises four Handymax carriers after it scrapped six bulk carriers by end-September 2017.

Earnings per share stood at 1.10 Singapore cents per share from a loss per share of 4.57 Singapore cents a year ago. No dividend was recommended for the period.

For the nine-month period, losses narrowed to S$75 million from S$154 million on the back of a one per cent dip in revenue to S$29.2 million.

Trading in the shares of Cosco Shipping was halted mid-Friday pending the offer announcement with the counter last traded at 30 Singapore cents.

Cogent shares had risen two Singapore cents or 2 per cent to 99 Singapore cents by mid-day before trading was halted for the release of the announcement.