SINGAPORE - THE controlling shareholder of ECS Holdings is making an exit offer to take the mainboard-listed company private.
VST Holdings, which hold an 89.5 per cent stake in ECS, is offering minority shareholders 68 cents a share.
This works out to a premium of 11.5 per cent to the shares last traded price of 61 cents on Sept 22.
Trading of the shares was halted on Sept 25 following disclosure by the company that the public float had fallen below 10 per cent.
Under the listing rules, the Singapore Exchange may suspend the trading of shares once this 10 per cent threshold is breached.
VST intends to make ECS its wholly-owned subsidiary and does not intend to preserve the listing status .
Accordingly, it does not intend to take any step or support any action by ECS to restore the public float or lift the trading suspension.
The exit offer presents shareholders who find it difficult to exit the company as a result of the trading suspension with an opportunity to liquidate and realise their investment in the shares at a premium over the market prices up to and including the last trading day on Sept 22, without incurring brokerage and other trading costs.
The trading volume of ECS shares, prior to the loss of the public float has been low, with an average daily trading volume of some 99,952 shares, 71,569 shares and 128,443 shares during the one-month, three-month and 12-month period prior to the trading suspension.
ECS executive chairman Tay Eng Hoe, who holds 700,000 shares, has undertaken to accept the offer.
VST believes that privatising ECS will enable it and management of the company more flexibility to manage its business, optimise the use of its management and capital resources and facilitate the implementation of any operational change.
ECS will also be able to save on expenses relating to the maintenance of a listed status and focus its resources on its business operations.