US$0.375-SGXL.SI
The Teo family has proposed to take PCT private via voluntary delisting, with an offer price of US$0.43 a unit, 15% above the last traded price of 37.5 cents, but 4% off the IPO price of 45 cents back in 2006. (PCT was the first listed shipping trust, and indisputably the best of the lot.)
The proposal needs, among others, to be passed by at least 75% of votes at an EGM to be convened, and is subject to the offerors getting at least 75% of the trust at the close of the offer.
We are surprised with the proposed delisting, given financing has largely been arranged for the construction of 9 new vessels (7 bulk carriers and 2 multi-purpose vessels) costing US$333 mln, and to be delivered between Sept ’11 (PST has recently taken delivery of 1 bulk carrrier) and 2014.
But this will raise PST’s gearing, which is already on the high side, at almost 50% at end Jun ’11.
While the latest distribution (annualized 3.236 cents based on payout for H1 ’11) seems sustainable, translating to 8.6% at last traded price, the Teos are likely to succeed with their offer, given the nervous state of the stock market, and also given the general disappointment with shipping trusts, specifically cuts in distribution not very long after listing.
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