3HA Capital to privatise watch-listed CosmoSteel after buyout offer accepted

Watch-listed company CosmoSteel Holdings will be delisted from the Singapore Exchange (SGX) as it no longer satisfies the bourse’s free-float requirement.

This comes as an offer by investment holding company 3HA Capital to privatise the group has received valid acceptances in respect of some 236.1 million shares, representing some 90.3 per cent of the piping-systems provider’s total shares.

As at 6 pm on Thursday (Jul 31), 3HA Capital and its concert parties owned, controlled or had agreed to acquire around 237.1 million shares, representing 90.7 per cent of CosmoSteel’s total issued shares. This left under 10 per cent of shares that were publicly held.

3HA Capital said on Thursday that it intends to compulsorily acquire all the offer shares it does not yet own and proceed to delist CosmoSteel from SGX.

The offer closes at 5.30 pm on Friday.

Chance for shareholders unwilling to bear risks

On May 15, 3HA Capital made a voluntary conditional cash offer for all CosmoSteel shares at a price of S$0.20 a share.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

3HA Capital is a special-purpose vehicle whose shareholders include Hanwa Singapore, a wholly owned unit of Tokyo-listed Hanwa Co, which in turn is a controlling shareholder of CosmoSteel. Hanwa Co owned some 82.6 million shares of CosmoSteel or around 31.6 per cent of its entire paid-up issued capital, as at May 15.

The offeror noted that the piping-systems provider, on the SGX watch list since June 2018, had faced potential suspension from trading if it failed to meet the watch-list exit criteria by the extended Jun 4 deadline.

3HA Capital said that the offer was an opportunity for shareholders “who are not prepared to bear the risks associated with the company” to realise their investments at a premium to historically traded prices.

It added that the offer price was a premium of 48.1 per cent over the counter’s last-traded price of S$0.135 on May 14.

On Jun 23, the offeror revised its offer price upwards to S$0.25 a share after an independent financial adviser deemed its initial offer unfair.

The revised offer turned unconditional in all respects on Jul 7, after it received valid acceptances representing around 50.2 per cent of all CosmoSteel shares.

The counter closed unchanged at S$0.25 on Thursday.