NGSC proposes selective capital reduction scheme as means to delist from SGX

MAINBOARD-LISTED NGSC said in a bourse filing on Monday that it will seek its minority shareholders' approval at an extraordinary general meeting (EGM) to cancel all of their 4,748,638,828 shares for 0.155 cents per share in cash through selective capital reduction in its bid to delist from the Singapore Exchange (SGX).

Notice of the EGM, as well as a circular containing relevant information of the capital reduction, will be sent to shareholders and made available on the company's website in due course.

The selective capital reduction is a corporate exercise to give minority shareholders an opportunity to fully exit their investment in the shares in return for cash.

"Following the suspension of trading of the shares at 9am on Jan 3, 2020, the company understands that it has become difficult for the participating shareholders to exit their investment in the shares given the lack of a public market for the shares," NGSC said in its filing.

After the capital reduction, the company's share capital will be reduced from S$145,623,000 comprising 6,424,735,828 shares, to S$138,262,609.82 comprising 1,676,097,000 shares, representing a reduction of total issued shares by about 73.9 per cent.

While the board has considered undertaking a voluntary winding up, it determined that selective capital reduction would be "a more viable and efficient exit proposal for shareholders".

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The satellite-based services company's controlling shareholders, who hold its remaining 26.09 per cent of shares, have approved the cancellation of the shares, provided that the price per minority share is cancelled for 0.155 cents and that the exercise is completed by Nov 30 this year. The price of each share was arrived at after considering the cash amount in the company and its needs post-delisting.

The Singapore Exchange Securities Trading notified the company on Dec 3, 2019 that it had to come up with an exit offer to shareholders and suspend trading, as it had not met the criteria for removal from the bourse watch-list for companies with pre-tax losses or low average daily market cap.

The capital reduction comes after a number of attempts by the company to find a viable cash exit alternative for shareholders. Most recently, exploratory talks with MC Payment, in which the digital payments company was to potentially acquire a 51 per cent interest in NGSC, concluded with no outcome.