Abterra seeks shareholder approval to delist without an exit offer
Vivienne Tay
ABTERRA will hold an extraordinary general meeting (EGM) on Sep 14 for shareholders to vote on the mineral and resources company’s proposed delisting without an exit offer.
On Wednesday (Aug 30), Abterra said that it had considered several exit options, including making its own exit offer and getting exit offers from controlling or major shareholders, but was unsuccessful in doing so.
The group had also considered liquidation but concluded that the process could run longer and incur additional expenses due to the group’s complex corporate structure.
Abterra had sought an exit offer from its holding company, General Nice Resources (GNR) Hong Kong, which holds a 27.93 per cent stake in the company. GNR, however, could not provide an exit offer due to its ongoing liquidation process, which started in 2016.
The company’s management had also contacted other major shareholders to gauge interest in an exit offer, but no shareholder has expressed any intention to do so.
Furthermore, Abterra assessed that it could not make its own offer through a selective share buyback due to insufficient financial resources, even if it was allowed by the court.
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The company’s offer would also have to comply with the Companies Act, which does not allow a company to acquire its entire share capital. It is also not aware of any shareholder willing to remain in the company post-offer to comply with this rule.
The group’s cash and cash equivalents as at Jun 30, 2021, stood at S$149,000, while current liabilities amount to around S$10 million. From Jul 1, 2021, to Dec 21, 2022, current liabilities stood at S$13.3 million.
“Currently, the company has no revenue income and no profit, and its liabilities are accumulating with each passing year,” Abterra noted.
It expects operating costs to go down if the delisting goes through, and has plans to restart its business from mainland China and Hong Kong and redevelop its business in Australia.
Abterra will source for coal suppliers in Australia and sell the purchased coal to customers in China. It noted that it has a “ready pool” of leads from GNR’s contact list, as GNR was a major coal importer in previous years.
“The company has also received favourable responses from financial institutions in Hong Kong willing to finance the group’s operations in Australia,” Abterra said. It added that it is hopeful that it will be able to improve shareholder value after the proposed delisting.
After considering these options, Abterra’s board recommended that shareholders vote in favour of the proposed delisting at the upcoming EGM.
It said that delisting would be in the best interests of the company and its shareholders, as it would allow the company to have more flexibility in raising funds and increasing its revenue streams.
Trading in Abterra shares was suspended in July 2018.
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