Offshore marine group Otto Marine has received a formal acquisition offer for its shares and is likely to become the first company from the hard-pressed sector to be delisted.
In an exchange filing yesterday, the company said it has received an exit offer of 32 cents per share from RHB Securities, the potential buyer's financial adviser.
This is a premium of 39.13 per cent over the share price of 23 cents on June 1, the last full day of trading in the shares before the company called for a trading halt.
The potential buyer, Ocean International Capital, does not intend to revise the exit offer price, said Otto Marine in its exchange filing.
Ocean International Capital is a special-purpose vehicle incorporated in the British Virgin Islands for the purposes of making the exit offer. Malaysian tycoon Yaw Chee Siew, who owns 61.2 per cent of Otto Marine, is its sole director.
The delisting is subject to holders of Otto Marine Services' multicurrency term notes agreeing to certain terms.
Under the terms of the notes maturing on Aug 1, in the event of a delisting or suspension in trading of the firm's shares for a continuous period of more than 14 market days, bondholders have the option to redeem the principal outstanding on the notes plus interest.
A meeting will be held to obtain the consent of bondholders to extend the maturity date of the notes for a further six months or until the date on which a delisting of the company has been completed, and to agree not to exercise or to waive their option to redeem the notes.
The notes will be redeemed after and subject to the successful delisting, the company said.
Mr Yaw has entered into an agreement with RHB Bank to extend a conditional loan to redeem the notes in full, subject to the bank's internal formal approvals.
Otto Marine said in its exchange filing that the delisting will give shareholders the chance to realise a premium on their shares.
The opportunity to sell shares at the exit offer price might not otherwise be readily available as trading volumes have been low, it noted.
The delisting would also give the management greater flexibility to develop existing businesses while exploring opportunities without the attendant costs, regulatory restrictions and compliance issues associated with being listed.
The potential buyer has no current intentions of making material changes to the group's existing business or redeploying its fixed assets, the company said.
An extraordinary general meeting (EGM) will be convened for shareholders. The firm will dispatch a notice on this in due course.
If the delisting resolution is approved at the EGM, the exit offer will be open for at least 14 days after the date of the announcement of shareholders' approval.
Details about the formal acquisition offer were released after the market closed yesterday.