SINGAPORE - Scientific equipment supplier Techcomp (Holdings) Ltd announced on Wednesday that it will undergo a reorganisation, following agreements to sell 61.6 per cent of the company's shares to Baodi International Investment Company, which is ultimately owned by China's state-owned Assets Supervision and Administration Commission of the Yunnan Provincial People's Government.
Upon completion of the group reorganisation, mainboard-listed Techcomp will be split into two parts: the Remaining Group and the Privateco Group, it said in a filing to the Singapore Exchange.
The Remaining Group will be controlled by Baodi, while the Privateco Group will be majority controlled by Lo Yat Keung, Techcomp's president, executive director and controlling shareholder, who, together with his spouse, owns 40.8 per cent of Techcomp shares.
The Privateco Group will cease to be a subsidiary of Techcomp. But Techcomp said Baodi intends to maintain the business listing - apart from the Privateco Group - in both Singapore and Hong Kong.
Offeror Baodi will make a mandatory cash offer of HK$3.267 per share to current shareholders acquire all the issued shares as part of the Hong Kong Exchange's Takeovers Code.
Additionally, Circle Brown - a company directly and wholly owned by Mr Lo - has offered HK$0.84 a share in cash to shareholders, as Privateco is "not a listed security and will have less liquidity than listed securities".
The combined result of both offers, Techcomp said, will provide an opportunity for shareholders to realise their investment in the company at a combined price of up to HK$4.107, if they opt to accept both offers by Baodi and Circle Brown.
After the split into two parts, the Privateco Group will carry out Techcomp's "Distributed Business", namely the design, development and manufacture of various analytical instruments under the the Techcomp brand, as well as continue the distribution and provision of after-sales services for analytical instruments manufactured by third parties, primarily outside China.
For shareholders who wish to retain their investments in the "Distributed Business", they may choose not to accept the aforementioned Privateco offer and continue to hold their Privateco shares, but Techcomp cautioned that there is "unlikely to be any market for the Privateco shares since there is no intention to list the Privateco shares on any stock exchange".
The Remaining Group, under Baodi, will be engaged in the distribution and after-sales services for third party brands, as well as brands owned by the Distributed Business, primarily in China.
At 1.16pm, Techcomp shares in Singapore were trading at S$0.645 (HK$3.83), up S$0.275 or 74.32 per cent.
On the earlier share sales to Baodi, Techcomp said that on April 18, its board was informed by Mr Lo and Chan Wai Shing that they had entered into a share purchase agreement (SPA) to sell to Baodi a total of 122.18 million shares worth an aggregate of HK$399.15 million (S$57.15 million), which is around 44.4 per cent of Techcomp's issued share capital.
Mr Chan is a Techcomp executive director and owns 3.5 per cent of shares in Techcomp.
In a separate agreement, the board was also notified that one Guo Bing would be selling some 47.36 million shares in Techcomp to Baodi, for a total of HK$154.74 million, representing around 17.2 per cent of Techcomp's total shares.
As a result of the share agreements affecting some 61.6 per cent of the company's shares, Techcomp's board said it decided to undertake a reorganisation, and distribution in specie thereafter, subject to approval by shareholders.