SHARES of Catalist-listed healthcare provider Singapore O& G jumped sharply higher after its trading halt was lifted on Wednesday (Mar 9) morning.

 

As at 9 am, the counter leapt S$0.05 or 20 per cent to an intraday high of S$0.30 from its last price of S$0.25 before it called for a trading halt on Mar 4.

 

It later eased to close at S$0.295, up S$0.045 or 18 per cent with some 9.3 million securities changing hands.

 

No married deals took place throughout the day, according to ShareInvestor data.

 

The brisk trading activity comes after the group on Mar 7 announced it received a voluntary unconditional cash offer at S$0.295 a share.

 

The offeror, NewMedCo Group, is a special purpose vehicle consisting of the offer' s sponsor and promoters.

 

The offer sponsor, Hanaan Health Group, is majority-held by a special purpose vehicle that is in turn wholly-owned by Dymon Asia Private Equity (SE Asia) II.

 

Meanwhile, the promoters are Singapore O& G' s executive chairman Beh Suan Tiong, its executive director Heng Tung Lan and 3 specialist medical practitioners employed by the group. In total, they own around 71.4 per cent of the issued shares in Singapore O& G.

 

NewMedCo said it intends to make Singapore O& G its wholly-owned subsidiary and does not intend to preserve its listing status.

 

CATALIST-LISTED healthcare service provider Singapore O& G Group $ Singapore O& G: 1D8 0% has received a voluntary unconditional cash offer at S$0.295 a share from special purpose vehicle NewMedCo Group, according to a bourse filing on Monday (Mar 7).

 

Singapore O& G, which has 4 operating segments of obstetrics and gynaecology (O& G), paediatrics, cancer-related general surgery and dermatology, provides healthcare services in Singapore and Malaysia.

 

Meanwhile, the offeror NewMedCo is a consortium consisting of the offer' s sponsor and promoters.

 

The offer sponsor, Hanaan Health Group, is majority-held by a special purpose vehicle that is in turn wholly-owned by Dymon Asia Private Equity (SE Asia) II. According to the filing, its business is to invest in or acquire corporations in the healthcare sector.

 

Meanwhile, the promoters are Singapore O& G' s executive chairman Beh Suan Tiong, its executive director Heng Tung Lan and 3 specialist medical practitioners employed by the group: Lee Keen Whye, Joyce Lim Teng Ee and Choo Wan Ling. In total, they own around 71.4 per cent of the issued shares in Singapore O& G.

 

As at the offer announcement, the company has an issued and paid up share capital of S$28.1 million, comprising around 476.1 million shares.

 

NewMedCo said it intends to make Singapore O& G its wholly-owned subsidiary and does not intend to preserve its listing status.

 

It expects privatisation will give it and the management of the company more flexibility in managing its business, and optimise the use of its management and capital resources and facilitate the implementation of any operational change.

 

Noting that the trading volume of Singapore O& G' s shares have been generally low, the offeror said this presents shareholders a " clean cash exit opportunity to realise their entire investment in the shares at a premium over the prevailing trading prices of the shares without incurring brokerage and other trading costs" .

 

The offer price represents a premium of around 15.7 per cent over the last transacted price of S$0.255 on Mar 3, 2022, being the last full market day of which the shares were transacted prior to the offer announcement.

 

When compared to the benchmark prices of the shares up to and including Mar 3, the offer price also represents a premium of around 14.8 per cent over the counter' s volume weighted average price (VWAP) for the 1-month period, 12.2 per cent over 3 months, 11.3 per cent over 6 months and 11.3 per cent over for the 12 months.

 

Furthermore, NewMedCo said it expects Singapore O& G will unlikely require access to Singapore equity capital markets to finance its operations in the foreseeable future as it may tap on other funding sources such as bank borrowings.

 

A delisting will also enable the company to save on expenses relating to the maintenance of a listed status and focus its resources on its business operations, the offeror said.

 

NewMedCo added that subject to normal business conditions, it does not intend to make major changes to the business of the company or its management team, re-deploy its fixed assets or discontinue the employment of its employees.

 

The offer document is expected to be sent out in 14 to 21 days.

SINGAPORE O& G (SOG), a specialist healthcare provider for women and children, reported a 11.9 per cent decline in net profit to S$8.4 million for the full year ended Dec 31, 2021, from S$9.5 million the previous year.

 

This was in part due to a S$200,000 net loss reported by its joint venture due to start-up expenses for the establishment of a postpartum confinement centre in Johor and professional fees incurred. The centre is expected to commence operations by end-March.

 

Revenue for the full-year was 6.3 per cent higher to S$42.4 million from S$39.9 million the year before, attributable to contributions from the group' s dermatology and paediatrics segments, as well as higher patient load following the resumption of non-essential services in FY2021.

 

This was, however, offset by lower revenue from the group' s cancer-related and obstetrics and gynaecology segments.

 

Other operating income also dipped 36.7 per cent to S$900,000 as a result of fewer government grants.

 

Other operating expenses increased by 4.7 per cent to S$2.3 million due to higher administrative expense, credit card charges and insurance. This was offset by a reduction in expected credit losses of trade receivables.

 

Earnings per share for the full-year stood at 1.75 Singapore cents versus 1.99 cents the year before.

 

Net asset value per share came in at 10.25 cents as at end-2021, up from 9.04 cents the previous year.

 

The board declared a final dividend of 0.90 cent per share, lower than the 1.20 cent declared in FY2020.