ZICO Insights Law advises Huan Hsin Holdings Ltd on exit offer, compulsory acquisition and directed delisting
By way of background, on 19 December 2018, the SGX-ST issued a notification of delisting (“Delisting Notification”) to Huan Hsin Holdings Ltd (“Huan Hsin”) which stated, among other things, that the SGX-ST will proceed to delist Huan Hsin from its Official List and that pursuant to the Listing Manual of the SGX-ST, Huan Hsin, or its controlling shareholders, must provide a reasonable exit offer to the shareholders (“Shareholders“) of Huan Hsin.
On 29 April 2020, Huan Hsin and Pacific Moment Holdings Ltd. (the “Offeror”) jointly announced that the Offeror had made a formal proposal to the directors of Huan Hsin (the “Directors”) on an exit offer to be made to the Shareholders in connection with the directed delisting of Huan Hsin (the “Delisting”) by the SGX-ST. The Offeror had offered to make a conditional cash exit offer (the “Exit Offer”) to acquire all the issued and paid-up ordinary shares in the capital of Huan Hsin (the “Shares”) (excluding treasury shares), other than those Shares already held directly or indirectly by the Offeror as at the date of the Exit Offer (the “Offer Shares”), at the exit offer price of S$0.016 in cash for each Offer Share. The Exit Offer was, among other things, conditional upon the Offeror having received, by the close of the Exit Offer, valid acceptances of the Exit Offer which will result in the Offeror holding shares carrying more than 50% of the total voting rights in Huan Hsin (the “Minimum Acceptance Condition”).
The Offeror, controlled by both Mr. Hsu Hung Chun (the Chairman of Huan Hsin) and Mr. Hsu Cheng Chien (the Managing Director of Huan Hsin), is a special purpose vehicle incorporated under the Business Companies Act 2004 in the British Virgin Islands.
On 14 May 2020, the exit offer letter (the “Exit Offer Letter”) which contains, among other things, (a) the terms and conditions of the Exit Offer, (b) the letter from Huan Hsin to the Shareholders and (c) the relevant forms of acceptance, were despatched to the Shareholders.
On 8 June 2020, the Offeror announced, among other things, that as it had valid acceptances of the Exit Offer which will result in the Offeror holding shares carrying more than 50% of the total voting rights in Huan Hsin, the Minimum Acceptance Condition had been satisfied and the Exit Offer had turned unconditional.
On 10 June 2020, Huan Hsin and the Offeror jointly announced, among other things, that as the Offeror had received valid acceptances of the Exit Offer which will result in the Offeror holding shares carrying more than 90% of the total voting rights in Huan Hsin, the Offeror was entitled and intended to exercise its right under Section 215(1) of the Companies Act (Chapter 50) of Singapore, to compulsorily acquire all the Shares held by Shareholders who have not accepted the Exit Offer at the close of the Exit Offer (the “Dissenting Shareholders”).
The Exit Offer closed on 26 June 2020.
On 3 July 2020, the Offeror formally announced its intention to compulsorily acquire the Shares of the Dissenting Shareholders.
On 4 August 2020, the Offeror proceeded to exercise its right of compulsory acquisition. Following the completion of the compulsory acquisition of Huan Hsin by the Offeror, the Offeror became the sole shareholder of Huan Hsin.
On 12 August 2020, Huan Hsin was delisted from the Official List of the SGX-ST following the completion of the compulsory acquisition exercise by the Offeror.
On 5 October 2020, Huan Hsin was privatized and became known “Huan Hsin Holdings Pte. Ltd.”.
ZICO Insights Law LLC team on the deal comprises Mr. Yap Lian Seng (Managing Director), Dr. Qiu Yang (Director), and Mr. Denzel Chua (Senior Associate).