The offer by Chip Eng Seng&rsquo s controlling shareholders to take the construction and property firm private has received acceptances that gives the offerors control over 77.29% of the stake as of Jan 16.

 

Second Chance Properties is a shareholder whom has accepted the 75 cents per share offer.

 

Known for years as a listed company with a portfolio of retail properties that gives it a steady rental income stream, Second Chance has in recent years shifted its focus to investing in securities and collecting dividend instead.

 

The value of Second Chance Properties&rsquo ownership of Chip Eng Seng shares was disclosed when it responded to Singapore Exchange&rsquo s query why it had chosen to stop offering scrip dividends and paying out its shareholders with cash only instead.

 

Second Chance had declared a final dividend of one cent per share, which will go ex on Feb 1 and be paid to entitled shareholders on March 29.

 

In its response on Jan 16, Second Chance says that its proceeds from accepting the offer for its Chip Eng Seng shares would amount to $12.7 million. In contrast, the total amount it is obliged to pay is $9.26 million.

 

In addition, Second Chance expects to receive a further $5.4 million from the sale of a property, bringing the total impending cash infusion to $18.1 million, and reducing its gearing to below the current level of 0.26.

 

According to Second Chance, many of its shareholders who opted for dividends in the past had &ldquo complained&rdquo about the dilution as other shareholders chose to take scrip instead.

 

&ldquo Furthermore there will be cost savings in distributing cash dividends instead of scrip dividends,&rdquo the company adds.

 

In its Jan 9 quarterly portfolio update, Second Chance notes that as of Nov 30, Chip Eng Seng was its second-largest holding, taking up 4.19% of its total fair value of $246 million.

 

The largest holding, as of Nov 30, was Hong Kong quoted CITIC, constituting 4.42% of the fair value. The third, fourth and fifth largest holdings are China Mobile, China Citic Bank and Singapore Telecommunications, with 4.17%, 4.06% and 3.79% respectively.

 

MAINBOARD-LISTED Second Chance Properties announced on Tuesday (Nov 15) that the Lew Foundation has exercised the option to purchase its Lucky Plaza units under subsidiary Better Chance Properties (BCP) for S$13.39 million.

 

The Lew Foundation was founded by businessman Lew Chee Beng.

 

The group disclosed in June that the potential buyer of the units, #01-56/57/58/59, was Lew and/or his nominee, and that he had been granted the option to purchase the units in the Orchard Road shopping mall for a total consideration of S$13.39 million.

 

The option would have expired on Aug 1. An option fee of 1 per cent of the sale price has been paid to BCP.

 

Shares of Second Chance closed flat at S$0.24 on Tuesday, before the announcement.

 

Second Chance Properties has reported net profit of $14.2 million for FY2022 ended Aug 31, up 44.5% from the previous year.

 

Revenue increased 17.85% to $43.12 million in FY2022, compared to the $36.5 million in FY2021.

 

Earnings per share for FY2022 stood at 1.66 cents, up from the 1.30 cents in FY2021.

 

The company attributed its strong performance to the strategic shift in its core business, centered on investing in battered down stocks with strong fundamentals and high dividends for recurring dividend income.

 

Adjusted EBITDA increased by 40% to $17.57 million. Additionally, there was a realised profit of $6.6 million in FY2022 upon cash acquisition and disposal of few equity instruments held by the group, classified as financial assets at fair value through other comprehensive income. This gain was taken directly through retained earnings.

 

As at end Aug 31, cash and cash equivalents stood at $1.15 million.

 

The company has also announced that it is changing its name to Second Chance Strategic. In a statement, it said the company&rsquo s core business since 1999 has been investing in retail properties for rental income. Over the last few years, however, it has been divesting its properties progressively and investing the proceeds of such divestments in listed stocks to augment its dividend income.

 

The company intends to continue the strategic divestment of its real estate properties for this purpose.

 

&ldquo The board believes that the proposed change of name to Second Chance Strategic will better represent the group&rsquo s business activities and strategy, allowing the public to better identify with the company,&rdquo it adds.

 

For FY2022, a final dividend of 1 cent is to be declared, subject to shareholders&rsquo approval at the forthcoming AGM.

 

BETTER Chance Properties (BCP), a subsidiary of mainboard-listed Second Chance Properties : 528 +2.22%, has granted a potential buyer an option to purchase its Lucky Plaza units for S$13.39 million.

 

The potential buyer of the units, #01-56/57/58/59, is Lew Chee Beng and/or his nominee, Second Chance disclosed in a Wednesday (Jun 29) bourse filing. The option will expire on Aug 1. An option fee of 1 per cent of the sale price has been paid to BCP.

 

Second Chance said that the popularity of Lucky Plaza has declined and the mall is highly dependent on tourists. With the pandemic, rentals fell to almost half that of pre-Covid levels. It is uncertain whether rentals can revert to pre-pandemic levels in the near future, the company said.

 

&ldquo Therefore, when the company received an unsolicited offer to sell the freehold property, the management was of the view that it was a good opportunity, as well as a prudent business decision, for the company to sell off its property and utilise the proceeds to reduce the debts of the group,&rdquo it added.

 

The S$13.38 million price tag is S$1.79 million higher than the valuation undertaken by Colliers last Aug 31. Second Chance expects the sale to be completed by Jan 31, 2023.