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China Merchants Industry Investment to make pre-conditional offer for AVIC International Maritime shares

AVIC International Maritime Holdings Limited (AIMHL) said on Tuesday evening that China Merchants Industry Investment Limited intends to make a voluntary conditional cash offer for its shares at S$0.15 each.

The offer is subject to the pre-condition that a conditional implementation agreement, which the offeror entered into on Tuesday to purchase a number of AIMHL shares, is successfully completed, said the marine and offshore industry player in a Singapore Exchange filing.

If the pre-condition is not satisfied on or before the long-stop date of Dec 26, 2019, or another date as agreed by the Securities Industry Council of Singapore (SIC), the offer will not be made.

China Merchants Industry Investment Limited is a wholly-owned subsidiary of China Merchants Industry Holdings Co, Ltd (CMIH), and is principally engaged in investment holding.

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Its rationale for the offer is to combine the complementary business and expertise of CMIH, a leading offshore engineering equipment and service provider, and AVIC International Maritime to realise potential synergies. These include cross-selling to an enlarged customer base, economies of scale, improved productivity and cost efficiency, and sharing of domain knowledge.

The offeror also cited AVIC International Maritime's low historical trading liquidity, saying the offer is an opportunity for minority shareholders to realise their investment in the shares at a premium. The offer price is a 37.6 per cent premium over the closing price of S$0.109 on the day of the announcement.