CEO Phua offers to privatise TEE International at 21.5 Singapore cents per share

SINGAPORE (April 3): Phua Chian Kin, group CEO and controlling shareholder of TEE International, is offering to buy out other shareholders for 21.5 Singapore cents a share, valuing the company at S$108 million (RM342.34 million), announced the company on April Fool’s Day.

The company’s share last traded at 19.1 Singapore cents before trading suspension was called pending this announcement. Back in October last year, NRA Capital analyst Liu Jinshu issued a report valuing the company at 34.5 Singapore cents.

Shareholders happy with Phua’s offer can accept cash. They can also accept each TEE International share they own for one new share in an entity called Oscar Investment Private Limited, a vehicle wholly-owned by Phua to make this offer.

If Phua is successful, TEE International joins a growing list of companies delisting from the Singapore Exchange over the past two years.

According to the company’s April 1 announcement, Phua, who owns 56.19% of the engineering and infrastructure company, has already secured undertaking from a few other significant shareholders such as company chairman Bertie Cheng Shao Shiong to sell their shares to him. This means Phua has already secured 69.58% of the company.

In addition, TEE International has more than 186.3 million warrants outstanding, each entitling the warrant holder to buy a mother share at 25 Singapore cents each.

Phua is offering 0.001 Singapore cent for each of these warrants. “The warrant offer price is made in view that the scheme consideration is substantially lower than the exercise price per share of each warrant,” said the company.

Phua believes that the privatisation offer will give him “greater operational flexibility” in running the various entities under and controlled by him.

Over the past four years, TEE International has spun off two subsidiary companies for their own listing.

They are property developer TEE Land, and telecommunications networking firm CMC Infocomm, run by Phua’s two nephews, Jonathan Phua and Kevin Phua respectively. TEE Land, in turn, also has a property development joint venture listed in Thailand called Chewathai PCL.

TEE Land was listed at 54 Singapore cents and closed on March 31 at 20 Singapore cents, up 0.1 Singapore cent; CMC Infocomm was offered to the public at 25 Singapore cents and last traded at 7 Singapore cents, unchanged, on March 31.

At TEE Land’s last traded price of 20 Singapore cents, it values TEE International’s 63% stake at S$56.3 million. As for CMC Infocomm, TEE International holds a 42% stake, valued at nearly S$4.5 million.

On March 27, TEE International reported revenue for 3Q ended Feb 28 of S$52.6 million, up 13.1% y-o-y. However, earnings for the same period was down by two-thirds to just S$298,000 on higher costs. As of Feb 28, the net asset value per share was 20 Singapore cents at group level and 11.5 Singapore cents at company level. Its order book for engineering contracts stood at S$264 million.

The company’s shares will resume trading on Monday, April 3. — theedgemarkets.com.sg

For more stories, download TheEdgeProperty.com pullout here for free.