Pan Ocean proposes delisting from SGX with S$8.70 per share exit offer price

BULK shipping company Pan Ocean and its South Korean parent company Harim Holdings Co on Monday morning proposed to seek a voluntary delisting of the former's issued ordinary shares in the capital of the company from the official list of the Singapore Exchange.

In connection with the delisting, RHT Capital intends to make, for and on behalf of Harim, a conditional cash exit offer for all the shares which are registered on the register of shareholders in Singapore, up to a maximum of 206,896 shares, at an exit offer price of S$8.70 per share in cash.

This represents a premium, as the last transacted price of its shares was S$8 on May 10, its last trading day.

The delisting is not a privatisation exercise, Pan Ocean said in the joint Monday announcement. The company intends to maintain its primary listing on the Korea Exchange (KRX), and Singapore registered shareholders can elect to have their shares transferred from the Singapore branch register to the South Korea register if they wish.

The exit offer will not be extended to the shareholders of the company whose shares are registered on the company's principal register of shareholders in South Korea.

In the announcement, Pan Ocean and Harim said that in maintaining the dual listing, Pan Ocean incurs costs that could be focused on business operations.

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KRX is also geographically more aligned with the company's business operations and core business competencies, which are based in South Korea, it said.

Furthermore, trading liquidity in Singapore is generally thin, with an average of 86 shares traded in the last one month leading up to its last trading day. There are only 170,597 shares, representing about 0.03 per cent of the total number of issued shares, trading on the SGX, as at the Monday announcement.

Moreover, Pan Ocean has no need for access to capital markets and has not carried out any exercise to raise cash funding on the SGX in the last five years.

The delisting is subject to the approval of the SGX, and both the delisting and exit offer will be conditional on the obtaining of shareholders' approval at an extraordinary general meeting.

Shares of Pan Ocean were unchanged at S$8.00 at Monday’s close.