LHN Logistics’ takeover pre-condition to get JTC nod, subject to S$4.1 million fee
Michelle Zhu
JTC has no objections to a change in LHN Limited ’s indirect ownership in Hean Nerng Logistics and is prepared to give written consent for it. This is a pre-condition for Milkyway Chemical to make its S$0.2266 per share offer for LHN Logistics .
On Monday (Jul 31), LHN Logistics said JTC’s consent is subject to a payment of S$4.1 million to the statutory board.
Its parent company LHN Limited will hold an extraordinary general meeting at 9.30 am on Jul 31 to obtain approval from its shareholders, which is another pre-condition for Milkyway Chemical to make the offer.
LHN Limited plans to bear S$3.1 million of the fee payable, and loan Hean Nerng Logistics S$1 million to pay the remainder.
Assuming its subsidiary Hean Nerng Logistics bears the S$1 million of the JTC fee, this would translate to a wider loss per share (LPS) of S$0.0332 for LHN Logistics, as opposed to its FY2022 LPS of S$0.0269.
Pro forma net tangible assets (NTA) per share for FY2022 would stand at S$0.0821, instead of S$0.0881 after the payment.
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Bearing S$3.1 million of the fee payable would result in pro forma FY2022 earnings per share (EPS) of S$0.1024 for LHN, down from the reported S$0.1121. NTA per share for the period would stand at S$0.4449 after the payment, instead of S$0.4546.
Should LHN Limited bear the entire S$4.1 million JTC fee, this would translate to a pro forma FY2022 EPS of S$0.1020, and NTA per share of S$0.4445.
To recap, LHN Logistics in June announced that Milkyway Chemical – a chemical supply chain service provider in China – intends to make a voluntary general offer at the offer price of S$0.2266 per share in cash.
The approval of LHN Limited’s shareholders is required for Milkyway Chemical to launch the offer, as well as written consent from JTC for the change in LHN Limited’s indirect ownership in Hean Nerng Logistics.
The deal is expected to generate S$32 million in cash proceeds for LHN Limited.
Both LHN Limited and LHN Logistics are listed on the Catalist board. The parent company had spun off its logistics and transportation arm, in 2022.
Shares of LHN Logistics ended Friday unchanged at S$0.225, and LHN Limited ended flat at S$0.39.
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