KUALA LUMPUR (June 30): The proposed privatisation of Sealink International Bhd (KL:SEALINK) by Carimin Petroleum Bhd (KL:CARIMIN) has lapsed after the shipping company decided not to proceed with the scheme of arrangement, following opposition from a major shareholder whose stake was sufficient to block the deal.
In a Bursa Malaysia filing on Tuesday, Sealink said its board — excluding interested directors Lim Yew Hoe and Lo Ling — resolved not to table the proposed members' scheme of arrangement to shareholders after considering an undertaking from one of its major shareholders to vote against the exercise.
The shareholder holds more than 10% of the voting rights attached to the disinterested shares, exceeding the blocking threshold under the takeover rules. As a result, the proposal would not have been able to secure the level of approval required at a court-convened meeting.
Based on data from AskEdge, Sealink’s largest shareholder is Carimin with 19.5% interest, followed by Yong Kiam Sam and Yong Foh Choi with 13.92% and 9.14% interest respectively.
The board said it also considered the advice of its independent adviser, including an indicative valuation of Sealink's vessels and property assets, before deciding not to proceed with the proposal.
Kiam Sam was formerly the managing director of Sealink, but resigned from his role on Jan 16, citing personal reasons. He is the son of Sealink founder Foh Choi.
With the acceptance period expiring on June 30, the proposed privatisation is deemed to have lapsed.
The exercise was first announced on May 12, when Carimin proposed to acquire the 80.5% stake in Sealink that it did not already own for RM165 million in cash.
Carimin, which owns a 19.5% stake, or 97.5 million shares, in Sealink, offered 41 sen for each of the remaining 402.5 million shares, representing a premium of about 20.6% over Sealink's last traded price of 34 sen.
Carimin's existing 19.5% stake in Sealink was acquired from executive chairman Lo, who sold his entire 97.5 million-share holding to the company in January this year at 41 sen per share — the same price as the privatisation offer.
In June, Sealink requested Carimin to improve its offer, after which Carimin agreed to extend the deadline for the company to respond until the end of June to allow further deliberations.
As at end-March, Sealink’s net asset value stood at 45.44 sen per share. The group was also in a net cash position of RM11.36 million, with RM42.57 million in cash against total borrowings of RM31.21 million.
Executive director Lim, who serves on the boards of both Sealink and Carimin, was deemed interested in the proposed scheme and did not participate in the board's deliberations on the exercise.
In a separate development, Sealink shareholders rejected the re-election of non-independent non-executive directors Eric Khoo Chuan Syn @ Khoo Chuan Syn and Toh Kian Sing, as well as executive director Datuk Fabian Ng Eng Hieng, at the company's annual general meeting on Tuesday.
However, Lim and Lo were successfully re-elected as an executive director and the executive chairman respectively.
Shares in Sealink closed at 34 sen on Tuesday, giving the company a market capitalisation of RM170 million. Carimin ended the day at 39 sen, valuing the oil and gas services provider at RM91.21 million.