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OKH Global rescinds a contract with purchaser Chip Eng Seng Corporation

Singapore’s OKH Global has canceled a public tender with Chip Eng Seng (CES) due to lacking JTC confirmation. OKH received notice from CES and will refund deposits and payments as per contract. The move won’t significantly affect 2024 financials. The backstory involves an industrial building sale and a sole CES bid below fair value.

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SINGAPORE – Singapore-based investment holding company OKH Global has rescinded a public tender contract with Chip Eng Seng Corporation (CES) due to the former did not obtain a written confirmation from JTC Corporation (JTC).

In a statement, OKH Global said the deadline for the written confirmation was on 8 August, 2023, according to the agreement the group made with CES.

OKH Global did not mention the reason of not receiving the written confirmation from JTC in a filing with Singapore Exchange (SGX).

OKH Global received a written notification on 9 August from CES, which stated that CES wanted to cancel the public tender contract.

“Following the contract’s terms. If this cancellation happens, as per the contract’s terms, we will give the deposit back and any money CES paid, without adding any interest or taking any deductions.

“The rescission of the contract is not expected to have any material impact on the net tangible assets and earnings per share of the Company and the Group for the current financial year ending 30 June 2024,” it said.

The group will make further announcements, in compliance with the requirements of the listing manual of SGX when there are material developments in relation to the public tender.

Background

On 25 July 2022, OKH Global launched the public tender to sell a ten-storey industrial building located at 12 Tai Seng Link Singapore 534233 together with the plant and equipment.

The building is a leasehold estate with a leasehold term of 30 years commencing from 9 Oct, 2012, and has a remaining lease of about 20 years.

It includes a basement carpark located within the Paya Lebar iPark and has a gross floor area of approximately 10,839.93 square meters and a land area of approximately 4,335.9 square meters.

The building is owned by OKH Global’s wholly owned subsidiary OKH (Woodlands) Pte Ltd. The public tender closed at 3pm (Singapore time) on 5 Sept, 2022.

Only one bid for the property

OKH Global only received one bid from CES after multiple public advertisements and marketing efforts.

The building would have sold to CES at SG$35 million (US$28.2 million), lower than its fair value at SG$38 million.

According to a statement on 8 Nov, 2022, OKH Global said the disposal of the building would benefit the group and its shareholders due to the disposal presented as an opportunity for the group to unlock the underlying value or capitalise its investment in the building without incurring significant additional capital investment.

“The proposed disposal will allow the group to reallocate its resources to strengthen its financial position. In particular, the property is currently mortgaged to a financial institution for a loan and the group would be able to utilise the net proceeds of the selling of the building to fully settle the outstanding loan, which will reduce the current borrowings and financing cost and improve the gearing ratio of the group.

“The disposal demonstrates the group’s commitment to recycle capital for future growth and investments. The proceeds from the proposed disposal will strengthen the group’s capabilities to pursue other projects and enhance returns for its shareholders.

“Subject to the completion of the proposed disposal, the group will retain a certain amount of cash proceeds, which would benefit the group and shareholders of the company insofar as acquisition and/or development of properties identified by the group as well as to pursue of other projects by the group in its ordinary course of business,” it said.

Based on the group’s latest audited financial statements for financial year 2022, the net loss attributable to the property is approximately SG$2.81 million.

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Business

Taiwan’s FSC rejects CTBC Financial’s bid to acquire Shin Kong Financial, favoring Taishin’s merger plans

Taiwan’s Financial Supervisory Commission rejected CTBC Financial’s tender offer to acquire Shin Kong Financial, raising concerns about its plan, while Taishin Financial moves closer to a merger with Shin Kong. Both companies have scheduled shareholder meetings for 9 October.

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4 days ago

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17 September 2024

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On 16 September 2024, Taiwan’s Financial Supervisory Commission (FSC) rejected an application from CTBC Financial Holding Co. to launch a tender offer for Shin Kong Financial Holding Co., potentially clearing the path for Taishin Financial Holding Co. to proceed with its proposed merger with Shin Kong Financial.

Jean Chiu, vice chairperson of the FSC, stated at a press conference that CTBC Financial failed to provide a comprehensive implementation plan for the acquisition. CTBC had proposed acquiring between 10% and 51% of Shin Kong Financial’s shares initially, with plans to later fully integrate the company.

However, the FSC raised concerns over CTBC’s lack of detailed provisions on how it would manage various potential outcomes, particularly if it failed to secure full control of Shin Kong.

Additionally, the FSC highlighted gaps in CTBC’s understanding of the financial health of Shin Kong’s life insurance subsidiary, as well as a lack of firm commitments regarding raising the capital size of this subsidiary.

This uncertainty, combined with the method of payment proposed by CTBC—using a mix of cash and its own stock—raised concerns that the tender offer could negatively affect shareholders due to potential fluctuations in CTBC’s stock price during the transaction process.

CTBC’s proposal, announced on 20 August, included an offer of NT$4.09 (US$0.13) per share in cash and an exchange of 0.3132 CTBC shares for each Shin Kong share, amounting to NT$14.55 (US$0.46) per share. This bid was labeled by Taishin Financial as a hostile takeover attempt, as Shin Kong Financial’s board had not approved the offer.

In response, Taishin Financial, which has been vying for Shin Kong through a merger, revised its stock swap offer on 11 September.

The new offer included 0.672 Taishin shares plus 0.175 preferred shares for each Shin Kong share, translating to NT$14.18 per share—closer to CTBC’s offer. Taishin had earlier disclosed on 22 August its original plan to offer 0.6022 shares of its stock per Shin Kong share, which amounted to NT$11.32 (US$0.36).

Chiu emphasized that tender offers based on stock payments are rare in Taiwan, with only six cases since the 2002 revision of tender offer regulations.

She referenced Fubon Financial Holding’s acquisition of Jih Sun Financial in 2023, where cash was used instead of shares, to highlight how tender offers have traditionally been handled in the local market.

Chiu concluded by stating that although Taiwan’s financial market operates on free-market principles, takeovers should avoid disrupting market order and respect corporate stability.

Taishin Financial and Shin Kong Financial are set to hold a special general meeting on 9 October to secure shareholder approval for their merger plan, which will then require the FSC’s endorsement.

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Times Bookstores to close after nearly four decades in Singapore

Times Bookstores will cease operations in Singapore after nearly four decades, with its final outlet at Cold Storage Jelita closing on 22 September 2024. The closure is seen as being attributed to high rents, low sales, and rising operational costs, reflecting challenges faced by physical bookstores in Singapore.

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16 September 2024

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Times Bookstores will end its operations in Singapore after nearly 40 years, as its last remaining outlet at Cold Storage Jelita on Holland Road is set to close on 22 September 2024.

In a farewell statement posted on Instagram on 16 September, the English book retailer, established in 1978, invited customers to visit the store one final time. “Our happily ever after has finally come,” the post read. “It is with both a heavy heart and a sense of fulfilment that we announce the closure of Times Bookstores.”

The closure of Times Bookstores has been anticipated for several years. The company, owned by regional consumer group Fraser and Neave Limited, closed its branches in Plaza Singapura and Waterway Point in February 2024.

The shutdowns triggered a discussion in Singapore’s literary community about how to better support bookstores.

Struggles Facing Book Retailers

Times Bookstores has been affected by increasing rent, low sales, and rising operational costs. The Covid-19 pandemic exacerbated its challenges, with the business quietly closing outlets at Marina Square and Paragon in 2021.

A key warning came in 2019 when the retailer closed its 8,000 sq ft Centrepoint branch, once one of Singapore’s largest bookstores.

These closures reflect a broader struggle for physical bookstores in Singapore. Rising rent, higher goods and services taxes (GST), and increasing printing costs have driven book prices up, making it difficult for traditional retailers to compete.

Popular bookstore also shut its Marine Parade outlet on 18 June 2023, citing similar reasons, while Books Kinokuniya closed its JEM branch on 9 May 2022 due to slow sales and rental costs.

Future of Singapore’s Bookstores

Following the closure of Times, few large bookstore chains remain in Singapore. Books Kinokuniya, the largest bookstore in Singapore, continues to operate its flagship store at Takashimaya Shopping Centre.

According to a spokesperson from Toshin Development Singapore, cited by the Straits Times, Kinokuniya remains a key tenant, though no specific renewal dates were disclosed. The spokesperson added that Kinokuniya continues to engage with the landlord regularly to appeal to patrons and remain in trend.

Although Times Bookstores will no longer have physical stores in Singapore, its book distribution business, which supplies books from international and local publishers to other retailers, continues to operate.

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