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SP Corp shares rise 164% after privatization offer from Tuan Sing

SP Corp shares rise 164% after privatization offer from Tuan Sing

Singaporean commodities trading group, SP Corporation, reportedly saw a jump in its share price on Monday, after news emerged that it had received an acquisition and privatization proposal from investment holding company, Tuan Sing Holdings.

In a joint announcement posted on the Singapore bourse during the weekend, Tuan Sing had offered to privatize SP Corp through an arrangement scheme with $1.59 in cash for each scheme share.

A day before the announcement, shares of SP Corp were trading at 59 US cents ($0.59). The scheme consideration however, put its book value per share back to what it was on the 30th of June, this year.

The offer caused a 164.4% jump in SP shares, to $1.56 on Monday morning, a 97 US cents rise, with 391,300 shares traded. On the other hand, Tuan Sing’s share saw a 2.7% rise.

As of now, Tuan Sing holds around 80.2%, or 28.1 million shares, of SP Corp’s total issued share capital.

The commodity trading group trades in coal, metals, rubber, and other commodities and products associated with the metal, automotive, and energy industries in the continent.

The parties stated that as SP Corp has not conducted any fund-raising exercise in recent years on the Singapore Exchange (SGX), it will most likely not require access to funds from Singapore capital markets, and hence does not need to maintain its listing status.

With the acquisition and delisting of SP Corp, Tuan Sing will be able to decrease the costs associated with compliance and others for maintaining the two companies’ listing status.

Tuan Sing, which mostly deals in property development, believes that the two companies' management will be able to combine and optimize the usage of their management and capital resources.

The two also stated that the scheme will be an opportunity for shareholders to take back their investments at no additional brokerage or trading cost, which otherwise would have been difficult to do given the low trading liquidity.

It should be noted that to obtain approval for a scheme proposal, the Companies Act in Singapore stated that the majority of shareholders, representative of three-fourths of total share value held by those present and voting in the scheme meeting, must be in support of it.

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Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.