The offer price is S$0.899 per share

 

[SINGAPORE] Local tycoon Sam Goi has launched a cash offer to buy all shares of Tat Seng Packaging : T12 -3.23% that he does not yet own at S$0.899 apiece. 

 

He is obliged to make an offer for the company&rsquo s shares, given that his offer for shares of its controlling shareholder PSC Corporation : DM0 0% turned unconditional on Thursday (Aug 7). 

 

The Singapore code on takeovers and mergers requires that Goi make an offer for Tat Seng shares in the event that his PSC offer turns unconditional, or if he and his concert parties attain statutory control of PSC. 

 

As at 6 pm on Thursday, Goi&rsquo s offer for PSC received valid acceptances that brought the total number of the company&rsquo s shares held by Goi and his concert parties to around 70 per cent of all PSC shares.

 

As the shares held by Goi and his concert parties carried more than 50 per cent of the voting rights of all PSC shares, his offer was declared unconditional. 

 

Goi &ndash the executive chairman of Tat Seng &ndash along with the parties acting in concert with him, which includes PSC, held 64.2 per cent or 100.9 million of all Tat Seng shares as at Thursday. 

 

He does not intend to actively pursue Tat Seng&rsquo s delisting from the mainboard of the Singapore Exchange (SGX).

 

However, if the number of shares held by Goi and his concert parties comes to 90 per cent or more of all Tat Seng shares at the chain offer&rsquo s close, Goi will compulsorily acquire all of its remaining shares and proceed to delist it from the SGX.  

 

Dubbed &ldquo Popiah King&rdquo , Goi is also the executive chairman of Tee Yih Jia, the world&rsquo s largest producer of popiah skins.

Earnings per share for the period up at 6.44 Singapore cents from 5.35 Singapore cents 

 

CORRUGATED paper packaging manufacturer Tat Seng Packaging : T12 0% posted a 20.3 per cent increase in net profit to S$10.1 million for its first half year ended Jun 30, up from S$8.4 million a year ago.

 

This was mainly due to higher revenue from its China operations and increased finance income, the group indicated in financial statements released in a bourse filing late on Thursday (Aug 8).

 

Earnings per share increased to S$0.0644 up from S$0.0535 in the previous corresponding period.

 

An interim dividend of S$0.03 per share was declared for the half year, up from S$0.025 in the previous corresponding period. The dividend will be payable on Sep 20, 2024.

 

Revenue for the half-year ticked up 0.7 per cent to S$127.2 million from S$126.3 million.

 

Revenue from the group&rsquo s China operations increased 1.9 per cent or S$1.9 million to S$104 million as a result of increased sales volume, but this was offset by competitive product pricing and the weakening of the yuan against the Singapore dollar.

 

Revenue from its Singapore operations decreased 4.2 per cent to S$24.3 million on reduced selling price and reduced sales volume.

 

Gross profit was up 12.8 per cent to S$28.1 million due to higher sales volume from the company&rsquo s China operations, a reduction in raw material costs and lower production overhead cost per unit on higher utilisation in its Chinese facilities.

 

Finance income increased by 67.4 per cent or S$600,000 to S$1.6 million on increased interest income derived from fixed deposits and time deposits.

 

Looking ahead, the group said: &ldquo The excess capacity situation continues to dominate the corrugated packaging industry in China. Weak domestic consumption will also result in reduced demand for our products. These factors, combined with any increase in raw material prices, will have a direct impact on our profitability.&rdquo

 

It added that it will leverage its competitive advantages of operational efficiencies, good quality and better service to overcome the impact of intense competition and weak demand.

Tat Seng Packaging, which is 63.95%-owned by Hanwell Holdings, says the company is evaluating the feasibility of a possible spin-off and listing of Tat Seng Packaging (Suzhou) and the group&rsquo s other subsidiaries in China on a &ldquo suitable stock exchange&rdquo to be determined by the company.

 

Tat Seng&rsquo s business in China comprises the operating businesses in the country under Tat Seng Packaging (Suzhou).

 

According to Tat Seng Packaging, the proposed spin-off and listing will reduce the impact of market and economic conditions in China on the group&rsquo s operating businesses in Singapore.

 

It adds that the listing and spin-off will allow management to focus on each segment respectively.

 

Furthermore, the move will allow the business in China to be financially independent and have direct access to capital markets without relying on the company for financial support.

 

As the proposed spin-off is still in its early stages, Tat Seng stresses that the proposal is still dependent on the approvals and consents from the SGX-ST, as well as other relevant regulatory authorities and parties.

 

Allan Yap, executive chairman of Hanwell Holdings and Tat Seng Packaging Group, has resigned from both SGX-listed companies with effect from Sept 23, following a belated declaration that he has been made a bankrupt in Hong Kong.

 

Yap, who was also chairman of Master Glory Group, &ldquo vacated&rdquo from this Hong Kong listed company&rsquo s board on Aug 3 - the day he was ruled a bankrupt. 

 

The resignation was announced in Hong Kong on Aug 24, but not in Singapore, where under similar laws, bankrupted individuals are among those not to hold directorships.

Earlier, on Aug 7, Yap resigned as chairman from yet another Hong Kong listed company, hotel operator Greater Bay Area Dynamic Growth Holding, citing &ldquo other personal commitments&rdquo .

 

In a Sept 24 SGX announcement by Hanwell, Yap &ldquo expressed his apology&rdquo to the company for the oversight, as &ldquo he has been extremely busy engaged on his other personal commitments.&rdquo

 

&ldquo The board is of the view that the development of Dr Allan Yap being adjudged a bankrupt has no material impact as there is minimum implications on the Company&rsquo s business, financials and operations,&rdquo said Hanwell on Sept 24.

 

&ldquo The company has strong fundamentals in terms of its management team, sound balance sheet and would like to assure its customers, shareholders and investors that despite this unfortunate incident, the company remains committed to its business mission and will stay united at all times,&rdquo the company added.

 

Yap&rsquo s wife, Tang Cheuk Chee, executive director of Hanwell, has been actively buying shares from the market since the start of September.   Starting Sept 8 onwards, she has bought more than 7.1 million Hanwell shares. 

 

Tang now holds just over 10% of the company, and combined with Yap&rsquo s stake, she has a total direct and deemed interest of nearly 20%.

 

On Aug 13, Hanwell reported earnings for 1HFY20 that more than doubled to $9.92 million, as it enjoyed better margins even though revenue dipped slightly.

This is despite Companies Act prohibiting a bankrupt from being director

 

THE executive chairman of Hanwell Holdings and Tat Seng Packaging Group was made bankrupt in August, but these two Singapore-listed companies have to date not acted on Allan Yap' s directorship even though the law prohibits a bankrupt from being director.

 

Mr Yap was declared bankrupt after the court in Hong Kong granted a bankruptcy petition by creditors over debts of more than HK$685 million (S$121 million) arising out of personal guarantees given by the 64-year-old in respect of the liabilities of Hong Kong-listed Master Glory Group.

 

This has led to Master Glory announcing in a notice to the Stock Exchange of Hong Kong about the disqualification of Mr Yap as executive chairman following his bankruptcy with effect from Aug 3.

 

Master Glory, formerly Hanny Holdings, is an investment holding company principally engaged in security, property and water supply businesses, but it is now in liquidation.

 

Mr Yap' s position as executive chairman at Hanwell and its 64-per-cent-owned subsidiary Tat Seng does not seem to have been affected by his bankrupt status, however.

 

No announcements have been made to the Singapore Exchange by either of the two companies, despite Singapore' s Companies Act stipulating that an undischarged bankrupt is disqualified to be director.

 

Tat Seng said it will look into it and would probably follow up with an announcement today, when approached by The Business Times.

 

Hanwell, however, has not responded to BT queries.

 

Mr Yap had, in fact, announced the financial results of Hanwell in the capacity of chairman on Aug 13, after the Hong Kong court had adjudged him to be a bankrupt. He was re-elected to the board of Hanwell in June while his first appointment was in 2002.

 

Hanwell, used to be known as Provisions Suppliers Corporation, is a manufacturer and distributor of a variety of well-known brands of consumer products including Royal Umbrella rice, Beautex tissue paper and Fortune tofu.

 

Its net profit for the half year to June 30 more than doubled to S$9.9 million, buoyed by good performance from rice, cooking oil and tofu, though revenue was marginally lower at S$215.8 million.

 

Over at Tat Seng, Mr Yap was re-elected to the board in June as well. According to the company' s website, the executive chairman has over 30 years of experience in finance, investment and banking.

 

Mr Yap is the spouse of Tang Cheuk Chee, executive director of both Hanwell and Tat Seng.

 

According to the Companies Act, except with the approval of the court or the written permission of the official assignee who administers a bankrupt' s financial affairs, a bankrupt faces a maximum fine of S$10,000, a jail term of up to two years or both if he acts as director, regardless of where the bankruptcy order is made.

 

BT has reached out to the Accounting and Corporate Regulatory Authority for comments.