Adviser greenlights CITIC Envirotech's SGX-ST exit offer

It will voluntarily delist for 55 cents per share.

The independent financial adviser (IFA) in CITIC Envirotech’s privatisation plans has deemed the financial terms of its exit offer as “fair and reasonable,” according to a circular filed in SGX.

Novus Corporate Finance, the IFA to independent directors David Yeung, Tay Beng Chuan and
Lee Suan Hiang, arrived at this opinion based partly on the exit offer price and the firm’s “significant” decline in earnings.

“Based on the foregoing, we advise the Independent Directors to recommend that Shareholders accept the Exit Offer (if and when made), unless Shareholders are able to obtain a price higher than the Exit Offer Price on the open market,” the IFA said. The directors have concurred with the IFA’s advice.

On 10 December, CITIC Envirotech proposed that it will voluntarily delist from the Singapore Exchange Securities Trading Limited (SGX-ST) after receiving an offer from CKM (Cayman) Company Limited at a price of 55 cents each share. This represented a premium of 68.5% over 3M VWAP and 48.6% over the last closing price.

Also read: Small-cap stocks to gain ground over privatisation surge

Based on SGX-ST’s Listing Manual, the exchange may agree to an application for delisting if
the company gains approval from its shareholders by at least 75% of the total number of issued shares, excluding treasury shares and subsidiary holdings.

An exit offer must also be made to the shareholders, which must be deemed fair and reasonable, as well as include cash as the default alternative. The company is required to appoint an independent financial adviser, who will opine if the exit offer is fair and reasonable.