Pan-United to split off ports business to Hong Kong, raise S$60.9m from rights issue

CONCRETE supplier Pan-United Corporation, which also owns two ports in China, is proposing to split off its ports business and raise up to S$60.9 million from a rights issue to pay off port-related debt.

Up to 141.6 million new shares will be issued at S$0.43 each, or one new share for every four existing ordinary shares in the company.

The ports business, Xinghua Port Holdings, will be listed in Hong Kong.

The move is to allow investors the chance to better assess the respective market values of both businesses separately, Pan-United said.

After the various restructuring moves, a capital reduction exercise will be undertaken with the company's shareholdings in Xinghua to be distributed as shares to existing Pan-United shareholders.

Pan-United last traded at S$0.72 before a trading halt.

It also announced first quarter results for the three months ended March 31, 2017. Net profit from continuing operations fell 19 per cent to S$3.1 million, and revenue fell 14 per cent to S$153.2 million.

Pan-United's last major corporate action, prior to its ports acquisitions in 2013-14, was to split off its shipyard business in 2004. The shipyard was subsequently sold and delisted in 2007.