SINGAPORE - Mainboard-listed Halcyon Agri Corporation Ltd and China's Sinochem International Corporation have signed, together with several Halcyon Agri shareholders, agreements to combine their natural rubber assets to create the world's leading natural rubber supply chain manager.
The businesses will be combined under Halcyon Agri, which will continue to be listed on the Singapore Exchange.
Following completion of certain transactions, Sinochem will be the majority shareholder of Halcyon Agri, which will be the holding company of the expanded group.
The deal will create the world's largest and most comprehensive natural rubber supply chain manager, the companies said on Monday (March 28).
Sinochem International will acquire a 30.07 per cent shareholding in Halcyon Agri for S$0.75 cents per share in cash and make a mandatory general offer (MGO) to all shareholders of Halcyon Agri at the same price. Certain shareholders of Halcyon Agri have also provided undertakings such that Sinochem's shareholding in Halcyon Agri following completion of the MGO will be no less than 53.98 per cent.
Halcyon Agri, whose shares last traded at S$0.73 on Wednesday, requested on Monday that its trading halt be lifted.
Subsequent to the MGO, Halcyon Agri will make a voluntary general offer (VGO) for Singapore-listed GMG Global Ltd, a subsidiary of Sinochem, at an exchange ratio of 0.9333 Halcyon shares for each GMG Global share. Sinochem has undertaken to accept the VGO in respect of its 51.1 per cent shareholding.
Finally, Halcyon Agri will also acquire Sinochem's natural rubber processing assets in China and Malaysia and trading businesses, for consideration of 280 million Halcyon Shares.
In the upstream segment, the combined business would have 153,000 hectares of land in Africa and South-east Asia. In the midstream processing segment, the combined business would have 35 processing facilities spanning Indonesia, Thailand, Malaysia, China and Africa with a total annual processing capacity of approximately 1.5 million tonnes.
"The global distribution strength of the combined business would be unparalleled, with an extensive distribution network centred around key hubs in China, Asia, Europe and the United States and annual natural rubber and latex sales capability in excess of two million tonnes, said the companies.
The transactions are subject to, among others, the approval of Halcyon Agri shareholders at an extraordinary general meeting and regulatory and competition approvals in certain jurisdictions. Final completion of the transactions is expected by the end of the third quarter of 2016.
Australia and New Zealand Banking Group Ltd, Singapore Branch, is the financial adviser and Rajah & Tann Singapore is the legal adviser to Sinochem International in the transactions.
Deutsche Bank, Singapore Branch, is the financial adviser, TSMP Law Corporation is the legal adviser and PrimePartners Corporate Finance is the compliance adviser to Halcyon Agri.