Developer Top Global is seeking a delisting from the Singapore Exchange to escape looming penalties it would otherwise have to pay for unsold homes a year from now.
If it succeeds, Top Global would become the fourth property firm in Singapore to exit the bourse in recent years for this reason.
Executive chairman Oei Siu Hoa, also known as Sukmawati Widjaja, yesterday launched a cash offer to buy out minority shareholders for 33 cents a share.
The offer represents a 50 per cent premium over the last traded price of 22 cents last Friday. Top Global called for a trading halt on Monday. The last time the shares traded at 33 cents was in December 2015.
Madam Oei is the younger sister of tycoon Oei Hong Leong, and vice-chairman of the Widjaja family-controlled Indonesian conglomerate Sinar Mas Group. She bought a majority stake in Top Global in 2010, and as of yesterday, held a 77.4 per cent stake.
The offer is conditional upon her receiving acceptances amounting to at least 90 per cent of issued shares by the offer close.
The offer statement flagged the fact that unless Top Global is privatised, two of its residential projects, R Maison and E Maison in Braddell, will be subject to what are called Qualifying Certificate (QC) penalties after March next year.
At present, about 20 per cent of the 45-unit R Maison remains unsold, while 40 per cent of the 130-unit E Maison remains unsold.
Under the QC requirement intended to reduce speculation in Singapore's property market, a penalty will be incurred on property units developed by "foreign" companies that remain unsold two years after completion.
All listed firms are technically considered foreign since they count non-Singaporeans among their shareholders.
Popular Holdings delisted in 2015 and SC Global delisted in 2013 - both to avoid QC charges.
Soilbuild Group delisted in 2010, obtained QC cancellations upon delisting, and re-listed Soilbuild Construction Group in 2013.
Another Top Global project, The Quinn in Bartley Road, will be subject to QC rules by June next year.
However, QC penalties will be avoided in that instance since the company said yesterday that four of its subsidiaries had exercised options to purchase 17 units for $25.3 million. That will account for all the outstanding unsold units at The Quinn.
Still, Madam Oei's offer vehicle said it would be "challenging" for Top Global to avoid making further losses when its subsidiaries sell the Quinn units over the next three years as any such sale will still be subject to seller's stamp duty.
The company added that if market conditions continue to deteriorate and Top Global is unable to sell the remaining units of The Maisons while incurring further losses from sales of The Quinn units, it may have to seek alternative avenues of funding to foot the QC penalty charges as well as a $52.6 million bank loan due for repayment on March 31 next year.
