NICO Steel will delist from the Singapore Exchange (SGX) on Aug 7, the company said on Monday (Jul 24). 

At an extraordinary general meeting in June, shareholders of the metals supplier approved of the delisting even without an exit offer. 

For the six months ended Feb 28, 2023, Nico Steel posted a loss of US$149 million mainly due to market disruption, supply chain disruptions arising from Covid-19 and inflationary pressures. 

The company had in June received questions from the Securities Investors Association (Singapore), or Sias, about its plans to delist.

David Gerald, president and chief executive of Sias, asked if Nico Steel’s independent directors considered a sale and leaseback of the group’s Loyang property to monetise its assets. This would put the company “in a position to make an exit offer which would not significantly and adversely affect the company’s operations”.

The company responded that the sale of the property, which it considers a key operating asset, would “significantly and adversely affect the company’s operational and financial position, and would materially prejudice its going concern status”.

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It added that while it had statutory reserves, this amount would not be sufficient to make a fair and reasonable exit offer. 

Nico Steel was first placed on SGX’s watch list in September 2016 for posting three straight years of pre-tax losses and failing to maintain a market cap of at least S$40 million.

It had until September 2020 to exit the financial watch list, after the SGX gave it a one-year extension to do so.

However, it failed to meet the necessary criteria, and received a notification of delisting in October 2020. The company has been suspended since November 2020.