Citic Envirotech makes formal unconditional exit offer

THE formal exit offer for Citic Envirotech was made on Friday, after the earlier fulfilment of the pre-condition of obtaining requisite approvals from China authorities, as well as the obtaining of shareholder approval for its voluntary delisting at a Dec 31 extraordinary general meeting.

The exit offer price of S$0.55 a share represents a premium of 68.5 per cent over the three-month volume-weighted average of S$0.326. The offeror is the company's majority owner, Citic Group Corp's Citic Environment Investment Group.

As the concert group holds more than half the total issued shares, neither the delisting nor the exit offer is conditional upon a minimum number of acceptances being received. The unconditional offer closes at 5.30pm on Jan 17.

For optionholders, the offeror is making a separate options proposal. There are 7,857,200 outstanding options exercisable into an equivalent number of shares, with exercise prices ranging from S$0.276 to S$0.5675 per share.

As the options are not transferable by optionholders, the offeror is not offering to acquire the options, though the exit offer will be extended to all new shares unconditionally issued or to be issued pursuant to the valid exercise of any options before the closing date.

Instead, the proposal is to pay optionholders a cash amount if they agree not to exercise their options and not to exercise any of their rights as optionholders. Optionholders who accept this must surrender their relevant options for cancellation.

The option price is computed on a "see-through" basis - the amount of the exit offer price, less the option's exercise price.