Published January 17, 2009

Ban Joo's new majority owner makes 1 cent a share offer

By UMA SHANKARI

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Singapore SHAREHOLDERS of loss-making textile supplier Ban Joo & Company have received a mandatory buyout offer from new controlling shareholder Telemedia Pacific Group - at the offer price of one cent a share.

Telemedia said that as Ban Joo's new controlling shareholder, it intends to direct the firm to enter into the fibre optic cable business.

The deal values Ban Joo at $45.3 million. In August 2008, Ban Joo entered into a conditional share placement deal with Telemedia Pacific to raise $23 million, which will allow it to enter into the submarine cable business.

On Thursday, Telemedia Pacific completed its share subscription. Following this, it holds 2.3 billion new Ban Joo shares (giving it a 50.72 per cent stake) and 2.3 billion warrants.

Telemedia Pacific is controlled by Hongkonger Hady Hartanto. Ban Joo - a company on the Singapore Exchange watchlist - said in a separate announcement yesterday that Mr Hartanto, 44, has been appointed as an executive director of the company.

Telemedia Pacific is making the unconditional offer for all remaining Ban Joo shares in line with Singapore's listing rules, which state that a shareholder whose stake in a company crosses the 30 per cent-mark is required to make a general offer for all remaining shares.

The offer price is a discount of about 33 per cent to Ban Joo's last traded price of 1.5 cents on the Singapore Exchange on Jan 15, the last day of trading before yesterday's announcement. The stock closed trading yesterday at two cents, up half a cent or 33.3 per cent.

Telemedia is also offering to buy all the outstanding warrants issued by the company at 0.01 cent apiece.

Telemedia said that as Ban Joo's new controlling shareholder, it intends to direct the company to enter into the fibre optic cable business - as previously planned. Ban Joo will now acquire Telemedia Pacific Inc 'or such other company or asset as the offeror may nominate to carry out the fibre optic cable business'.

Telemedia Pacific intends to maintain the listing status of Ban Joo and it does not intend to exercise any rights of compulsory acquisition in the event that it receives valid acceptances of not less than 90 per cent of the all remaining shares in the company.

Ban Joo Investment (Pte) Limited, a substantial shareholder with a 25.23 per cent stake in Ban Joo, has given an irrevocable and unconditional undertaking that it will not be accepting the offers.

In December 2008, Ban Joo was put on the Singapore Exchange's watchlist for recording pre-tax losses for the latest three consecutive fiscal years and having an average daily market capitalisation of less than $40 million over the last 120 trading days.

Companies on the watchlist face the risk of being delisted if they are unable to return to the black or do not have enough market capitalisation within two years on the list.

In the last financial year ended Sept 30, 2008, Ban Joo's net loss widened to $17.4 million - from $15.05 million the previous year - due to impairment on trade and other receivables, fair value losses, forex losses and interest expenses.