Updated: CWT seeks update from HNA on S$1.4b takeover offer

CWT Limited has sought an update from Chinese dealmaking juggernaut HNA Holding Group on the latter's S$1.4 billion privatisation offer for the Singapore-listed logistics group.

The query comes after Hong Kong-listed HNA said the anti-trust pre-conditions have been satisfied. HNA now needs to convene a general meeting to seek shareholders' approval. HNA has up to Sept 9 - five months from the day it announced its intention - to fulfil all pre-conditions before it can proceed with the offer.

CWT said it has written to the offeror, HNA Belt and Road Investments (Singapore) Pte Ltd, and HNA Holding Group for an update on the planned acquisition. In reply, HNA said it has informed its shareholders that a general meeting was scheduled to be held between end August and early September.

On April 9, HNA - a Hainan-based conglomerate run by billionaire Chen Feng - had launched a general offer for CWT at S$2.33 a share, valuing its 600.3 million shares outstanding at around S$1.4 billion. CWT chairman Loi Kai Meng and his son Loi Pok Yen, who is group chief executive; the family of Stanley Liao; and the family of Lim Soo Seng together own 65.1 per cent of the company and have undertaken to accept the offer.

Concerns over whether the planned takeover would materialise were heightened of late as China increased its scrutiny on high-profile prolific overseas dealmakers like HNA, which has announced US$50 billion of deals over two years, buying stakes in logistics companies, hotels and even Deutsche Bank Group AG.

"We are of the view that there is nothing difficult about convening a meeting of shareholders in China unless one was facing mounting governmental scrutiny and pressure,'' Justin Tang, director of global special situations at Religare Capital Markets told The Business Times.

Mr Tang echoed the general market concern that the delay in settng the general meeting date could be because HNA has not secured funding for the deal.

This follows media reports that HNA faced mounting pressure from its bankers over its debt levels and ownership structure. Just on Wednesday, US-based Global Eagle Entertainment said its US$416 million investment pact made last year with a unit of HNA has been called off after failing to receive Washington's approval.

To reassure investors, HNA recently reiterated that its financial position remained "strong" and that it was not reliant on a single source of funding for its business. Although HNA has 493.7 billion yuan of debt, it had reported 172.5 billion yuan in cash and cash equivalents at the end of last year. It also boasted of 611 billion yuan of committed credit lines from banks, of which around 40 percent was unused.

Still, Mr Tang is recommending CWT investors to use any rally in the share price to sell. CWT closed unchanged, at S$2.11 a share on Thursday.