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HMI to hold AGM by Dec 30 if privatisation deal fails; no AGM if deal gets nod

HEALTH Management International (HMI) will not hold its annual general meeting (AGM) and issue its annual report for fiscal 2019 ended June 30, in the event that its privatisation deal is approved by shareholders and sanctioned by Singapore’s High Court.

Alternatively, if the deal is not approved by shareholders or not sanctioned by the court by Dec 10, the company will have to hold the FY2019 AGM by Dec 30 and issue the annual report at least 14 days before the meeting date.

The Singapore Exchange (SGX) approved HMI’s Sept 9 application for either a waiver from compliance of listing rules to convene the AGM and issue the report, or a two-month extension of time for both.

Led by HMI’s management and private equity firm EQT, the bid in July to privatise the healthcare provider by way of a scheme of arrangement values the company at S$611 million. Minority shareholders can either accept S$0.73 in cash for each HMI share, or swap them for new shares in the offeror, PanAsia Health, issued at S$0.73 per share. HMI appointed Ernst & Young Corporate Finance as the independent financial adviser for the deal.

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In July, brokerages recommended HMI investors to take the cash offer, calling the deal “fair” and a clean exit amid low trading liquidity.

If approved by shareholders and sanctioned by the court, the scheme will become effective and binding, which means HMI will become a wholly owned subsidiary of the offeror and, subject to SGX’s approval, be delisted from the Singapore bourse’s main board.

Assuming the scheme meeting takes place this October, HMI expects the scheme to take effect and for it to become a private delisted company in December this year. This will be shortly after Oct 30, the original AGM deadline, which means holding the AGM and issuing the annual report on that date “would not be of much benefit or relevance” to HMI shareholders, and will also incur “unnecessary cost and expenses”, HMI said on Tuesday.

On the other hand, if the scheme is not approved or sanctioned, an extension of time will be required because it will be “taxing on the resources” of the company to run a parallel process of finalising the annual report and arranging for the AGM while preparing the scheme document, arranging for the scheme meeting, and seeking the court’s sanction, HMI added.

In addition, the company has on Aug 7 applied to the Accounting and Corporate Regulatory Authority (ACRA) for two-month extensions to hold the AGM by Dec 30, 2019 and to lodge its annual return by Jan 29, 2020. The ACRA application is still subject to approval, and HMI will update shareholders on material developments.

Shares of HMI were trading flat at 72.5 Singapore cents as at 3.37pm on Tuesday.