Aspial to privatise World Class Global unit via scheme of arrangement

JEWELLERY group Aspial Corp on Friday announced plans to privatise its subsidiary World Class Global through a scheme of arrangement, to simplify the group's structure.

World Class Global was spun off from Aspial and listed on the Singapore Exchange's Catalist board in 2017. Its main businesses include property development and property investment in major cities in Australia and Malaysia, as well as the operation of hotels in Malaysia.

Under the proposed scheme, all World Class Global shares held by its shareholders - other than those held by Aspial - will be transferred to Aspial. The shareholders will receive new ordinary shares in Aspial in exchange, at a rate of S$0.21 per World Class Global share to S$0.19 per Aspial share.

This means that a shareholder holding 100 World Class Global shares would receive 110 Aspial shares in exchange for the former.

Based on the more than 173 million shares held by World Class Global shareholders other than Aspial, representing about 18.9 per cent of the total shares, as at Friday, the total consideration for the scheme is about S$36.3 million. It means Aspial would have to issue up to some 191 million new shares.

The scheme is conditional upon the approval of Aspial's shareholders at an extraordinary general meeting to be convened.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Aspial noted that the consideration of S$0.21 per World Class Global share represents a premium of about 107.9 per cent over the one-month volume weighted average prices of the shares, up to and including March 11, which is when they last traded.

Aspial also noted that the closing share prices of World Class Global have not traded over S$0.21 since Jan 24, 2019.

The scheme is an opportunity for shareholders to exit their investment in World Class Global, while continuing to participate in its future growth through the enlarged group, Aspial said. "This may otherwise be difficult due to the low trading liquidity of the World Class Global shares and the challenging global and domestic economic outlook brought about by the Covid-19 pandemic."

Last month, World Class Global reported a full-year net loss of S$6.64 million, reversing from a S$13.63 million net profit a year ago. 

Revenue for the year ended Dec 31, 2020, was S$169.54 million, a 17 per cent year-on-year decline. This was revenue recognised from the settlements by purchasers of the Australia 108 residential development in Melbourne, the group had said.

World Class Global had also said that the outlook for the year ahead remains challenging with “global and domestic economic uncertainties” due to the pandemic.

In Australia, construction of Australia 108 had been completed last October and some of the available units have been leased out to generate rental income.

In Malaysia, the group’s hotel business in Penang have been adversely affected, with the completion of building works for four hotels under construction delayed to H2 2021, due to the government’s movement control order.