Two more SGX delistings expected as SLB Development, Japfa receive privatisation offers

SINGAPORE – Two more companies, property developer SLB Development and agri-food business Japfa, may be delisting from the Singapore Exchange (SGX) after receiving privatisation offers from their major shareholders.

The moves potentially extend a slew of SGX delistings that took place in 2024, which included Silverlake Axis, Best World International and

Isetan Singapore.

The announcements also come at a time when the local bourse is almost halfway through a 12-month central bank-led review to revive trading and draw more listings.

Construction company Lian Beng Group announced after the market closed on Jan 24 that it is offering 23 cents in cash per share to privatise its subsidiary SLB Development at a premium over SLB’s closing price of 17 cents.

The offer price is also approximately 16.8 per cent over SLB’s net asset value per share of 19.7 cents as at Nov 30, 2024.

SLB was listed on the Catalist board of the SGX on April 20, 2018.

Lian Beng currently holds about 708.5 million shares in SLB, representing about 77.6 per cent of the total number of issued shares.

In its announcement, Lian Beng said the acquisition is an opportunity for SLB’s shareholders to realise their entire cash investment at a premium over historically traded prices without incurring brokerage and other trading costs. 

Lian Beng added that the trading volume of SLB’s shares has “been generally low” over the past year, and that delisting will help it save on expenses and costs relating to the maintenance of a listed status and channel resources into business operations.

Lian Beng itself was privatised in 2024 by its chairman Ong Pang Aik and his family, through investment holding company OSC Capital, at 68 cents a share.

Separately, agri-food company Japfa also announced after the market closed on Jan 24 that it has received an offer from the family members of its founder to take it private at 62 cents per share. They own around 75 per cent of the shares.

Japfa, which runs chicken and pig farms in Indonesia and Vietnam, closed at 53 cents on Jan 24. The offer price also represents a premium over Japfa’s share price over the past four years, when the shares swung between 18 cents and 93 cents. Japfa was listed in 2014 at 80 cents.

The joint offerors – Mr Renaldo Santosa and Ms Gabriella Santosa, through their special purpose vehicle TAC 1; and Ms Rachel Anastasia Kolonas, through TAC 2 – are looking to acquire around 18.3 per cent of the total issued shares of Japfa, the company said on Jan 24.

The two Santosas are siblings, while Ms Kolonas is their cousin. The Santosa siblings are children of the late Mr Handojo Santosa, Japfa’s former executive chairman, who was also the son of the late Mr Ferry Teguh Santosa, who founded Japfa.

The offer is an opportunity for shareholders to realise their investment in the company at a premium to prevailing market prices, “which may otherwise be difficult due to the low trading liquidity of the shares”, the company said.

Japfa added that the move is expected to provide the offerors and the company’s management with greater flexibility to manage and grow the existing business.

“This will allow the company to pursue longer-term business strategies that may otherwise contrast or conflict with the shorter-term expectations of the public market.”

The privatisation offers, if they succeed, follow a slew of delistings from the SGX in 2024 – a total of 17 companies left the exchange compared with just four initial public offerings.

In August 2024, a review group led by Second Minister for Finance Chee Hong Tat, who is also deputy chairman of the Monetary Authority of Singapore (MAS), was set up to explore ways to revive trading and attract more companies to list on the SGX.

The group was given 12 months to produce a report.

At a Jan 2 event marking the first day of trading in 2025 and the 25th anniversary of the SGX, Deputy Prime Minister and MAS chairman Gan Kim Yong noted that the review group will focus on addressing three issues to rejuvenate the stock market.

These include better defining the profile of companies that Singapore wants to attract, such as real estate investment trusts, or Reits, as well as growth companies from Singapore and emerging markets.

The group will also work on broadening liquidity in the stock market beyond well-known counters, such as Singapore Airlines and the three local banks, to smaller stocks with market capitalisations between $500 million and $3 billion.

Efforts will also be made to draw more capital from institutional and individual investors, and family offices, DPM Gan, who is also Minister for Trade and Industry, said.

With increasing calls for Singapore’s investment company Temasek and sovereign wealth fund GIC to invest more actively in the SGX, DPM Gan also noted that “it is not practical to rely on sovereign monies alone to sustain these funds and to support the equity market”.

Finally, there will be a review of the SGX regulatory framework to ensure that “we do not impose unnecessary friction, but empower good companies to list, and enable consumers to make informed investment decisions”, DPM Gan said.

At a Jan 22 seminar, Mr Tan Boon Gin, chief executive of SGX Regulation, also told his audience that a review of the regulator’s trading and public query regime will be conducted in 2025 “to see if we have been applying that materiality principle consistently”.