Best World to buy back up to 10% of shares, no assurance of delisting

EMBATTLED beauty product distributor Best World International will buy back up to 54.4 million shares - representing 10 per cent of its issued share capital - at S$1.36 apiece, as part of an off-market offer.

The move, announced in a Dec 31 bourse filing, comes as Best World's investors have been in limbo over the past 2 years. Trading in the mainboard-listed stock was suspended in 2019 after the regulatory arm of Singapore Exchange, SGX RegCo, raised concerns over the legality of its business model in China.

Best World's share buyback offer price is unchanged from its last transacted price. The offer is open to all investors, except a group of shareholders who collectively control 51.56 per cent of the company.

These non-participating shareholders include founders Dora Hoan and Doreen Tan, executive director Huang Ban Chin, independent director Lee Sen Choon as well as Hoan's family member Li Lihui and Tan's family member Pek Jia Rong. Shares that are bought back will be cancelled.

On Nov 11, Best World had announced that it is exploring a delisting, while concurrently looking at options to provide shareholders with some liquidity.

"After careful consideration and taking into account the amount of surplus cash available, the prevailing market conditions and the circumstances surrounding the company, the directors are of the view that undertaking the equal access offer would be an appropriate interim measure for the benefit of shareholders," the company said in its latest filing.

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However, there is no assurance that Best World will be able to raise the necessary external financing to undertake any form of delisting exercise, it added.

Best World's directors also do not wish to carry out an equal access offer to the extent that it would adversely impact the company's liquidity, taking into account its working capital needs and gearing levels.

The company will next lay out further terms of the offer in a letter to be despatched to shareholders.

The long-running Best World saga traces back to a February 2019 report by The Business Times that first raised concerns over difficulties in reconciling sales of Best World's DR's Secret line of skincare products in China with consumer demand.

Short-seller Bonitas Research also cast doubt on the company's skincare product distribution model in China and its financials, which culminated in an independent review that uncovered questionable dealings.