China Taisan, China Hongxing Sports to delist from SGX

THE Singapore Exchange (SGX) has separately issued delisting notifications to fabric maker China Taisan Technology Group, and sporting goods company China Hongxing Sports, both companies announced on Tuesday. 

Mainboard-listed China Taisan has been on SGX's watch list since June 5, 2017, and its shares have been suspended from trading since June 2018. It has been under judicial management since August 2018.

Firms on the financial watch list need to fulfil exit requirements within 36 months, namely to record consolidated pre-tax profit for the most recently completed financial year, and post an average daily market cap of at least S$40 million over the last six months.

China Taisan will be delisted from SGX, as it was not able to exit the financial watch list by the deadline of June 4, 2020.

Last September, the High Court of Singapore granted that China Taisan be wound up, with liquidators from BDO appointed. The liquidators are now reviewing the delisting notification and will make further announcements as and when there are material developments on this, the company said. 

Separately, China Hongxing Sports, which became a cash company in May 2018, has also received a notification of delisting from the Singapore bourse. 

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Under the listing rules, SGX will remove an issuer if it is unable to meet the requirements for a new listing within 12 months from the time it becomes a cash company.

China Hongxing was granted several extensions by SGX to meet this new listing requirement as it involved a proposed reverse takeover that could make gold mining the core business of the company instead. 

However, SGX noted that as at July 7, there is a "lack of information on the financials and viability of the mining assets to demonstrate that the proposed transaction meets the requirements for a new listing".

Therefore, SGX is unable to grant any further extension for China Hongxing to satisfy the requirements for a new listing and will direct it to be delisted. 

Among other things, China Hongxing noted that the Covid-19 pandemic has caused "severe disruptions" to the company trying to meet the conditions stated in the extensions granted by SGX. 

It added that the target company is also seeking to raise capital to secure sufficient funding to finance the proposed transaction and for its operations. Nonetheless, due to the lockdown in the Philippines and Singapore, potential investors have not been able to complete their site visits and due diligence process, while scheduled road shows for investors were also postponed. 

Shares in China Hongxing have been suspended and last traded in February 2011. 

According to the listing rules, both companies or their controlling shareholders will have to provide a "reasonable exit offer" to shareholders, and submit an exit offer proposal to SGX no later than one month from July 6, which is the date when they received the delisting notifications.