Seatrium commences buybacks; Challenger’s substantial shareholder continues to buy stock
OVER the five trading sessions from Jun 9 to Jun 15, the Straits Times Index gained 1.76 per cent.
There were 76 filings for changes in director interests and substantial shareholdings in that period from 36 primary-listed stocks, as well as 63 filings for share buybacks by 18 companies.
Seatrium
The offshore and marine group has bought back shares for the first time since it was renamed. On Jun 12, the company paid S$0.124 apiece for 1,200,000 shares. This came up to a total consideration of S$148,980.79.
Seatrium was created from the merger of Sembcorp Marine (Sembmarine), and Keppel Offshore and Marine (KOM). It was renamed with effect from Apr 26, following an annual general meeting at which a resolution for its renaming was passed by shareholders.
The group has a large share base of 68.2 billion shares following the merger, and has only bought back 0.018 per cent of its allowed mandate according to data from Lim & Tan Securities.
The buyback came a few days after Keppel Corp sold 42 million Seatrium shares for S$5.16 million, on Jun 5.
Keppel’s interest in Seatrium now stands at 3.37 per cent. As a result of the Keppel sale, Temasek’s deemed interest in Seatrium dropped to 38.99 per cent from 39.05 per cent.
Keppel had received 36.8 billion shares in Sembmarine in exchange for KOM. The bulk of these shares was distributed to Keppel shareholders, but Keppel had retained 3.4 billion shares. These retained shares represented about 5 per cent of Sembmarine’s enlarged share capital.
The retained shares were for “contingent liabilities”, and Keppel has been gradually selling them. Keppel sold six million Seatrium shares on May 2, for S$735,952.80.
Shares of Seatrium are down 6.4 per cent this year, closing at S$0.13 on Friday (Jun 16). Since assuming its new identity, the company has had a rocky start.
It announced, on May 5, that it had been awarded a contract worth more than S$500 million to build two offshore wind farm substations. Construction for one of the substations will commence in the fourth quarter of this year, and work on the other will commence in the second half of next year.
These additional contracts will add to Seatrium’s green order book, as the company continues to diversify from its traditional business serving the oil and gas industry.
Earlier this month, however, investors were reminded that Seatrium’s change in identity will not preclude it from having to deal with its past.
On May 31, the Singapore’s Corrupt Practices Investigation Bureau (CPIB) said it has commenced investigations on the company and individuals from the company. The investigations are related to alleged corrupt offences that occurred in Brazil, where Seatrium has shipyards.
In response to queries from Singapore Exchange Regulation, Seatrium said CPIB has not provided the company with the identity of the individuals who are being investigated. “As far as the company is aware, investigations are ongoing, and no formal charges have been made against any of the key executives of the company,” Seatrium added.
Challenger Technologies
Substantial shareholder Digileap Capital continues to add to its stake in consumer electronics retailer Challenger Technologies .
Over the five trading sessions from Jun 9 to Jun 15, three transactions were reported. On Jun 9, Digileap Capital bought 15,000 shares for S$9,000. On Jun 12, it bought another 440,100 Challenger shares for S$264,060. On Jun 13, it bought another 2,923,200 shares for S$1,753,920.
With these three transactions, Digileap’s interest rose to 18.78 per cent from 17.94 per cent.
Separately, Challenger’s chief financial officer Tan Wee Ko is no longer a shareholder of the company. He previously held 1,788,000 Challenger shares, representing 0.44 per cent of the company.
Tan had accepted an offer for his shares from Digitech Holding, which is attempting to take Challenger private through a voluntary unconditional cash offer. His acceptance of the offer will net him S$1,072,800.
On May 30, Digitech offered S$0.56 a share for all shares of Challenger. The offer price was later raised to S$0.60 per share, which values Challenger at S$241.1 million and 24.4 times its earnings for FY2022.
Digitech is 35 per cent owned by Asia Consumer Electronics, which owns Digileap. Both companies are linked to Dymon Asia Private Equity.
The remaining 65 per cent of Digitech is owned by a special purpose vehicle called Fortuna Capital. Fortuna is, in turn, owned by Challenger’s chief executive Loo Leong Thye.
The takeover is expected to give the company more flexibility in managing its business, allowing it to optimise the use of its management and capital resources to implement any operational changes.
Loo and his family members own 47.3 per cent of Challenger.
Following transactions over the last five-day period, as well as acceptances of the offer, the offeror has a shareholding of 67.94 per cent. This includes shares held by Digileap and the Loo family, and shares directly acquired by Digitech.
Separately, a shareholder named Ng Leong Hai, who controls 20.68 per cent of Challenger, has provided an irrevocable undertaking to accept the offer.
Digitech now has undertakings in favour of its offer representing 88.62 per cent of all shares.
Challenger had attempted to delist from the Singapore Exchange in 2019, with Digileap Capital making a cash exit offer of S$0.56 per share. The voluntary delisting was voted down by minority shareholders who believed that the exit offer price was too low.
