Penguin International’s senior management and private equity backer hope it proves second time lucky in their attempt to take the Singapore-listed shipyard group private.
Executive chairman Jeffrey Hing and private equity outfit Dymon Asia have offered shareholders SGD 0.82 (61 US cents) per share in an offer set to close this evening (Thursday) at 5pm Singapore time.
This is the second attempt to take the builder of fast ferries and offshore wind industry vessels private in less than three years.
In January 2021, the consortium was only able to secure just over 80% of the shares in the Singapore Exchange-listed company when it offered SGD 0.65 per share. This was below the 90% free float requirement by the SGX.
The official version for the latest privatisation attempt is that it provides shareholders with “an opportunity to…realise their investment in the shares at a premium to the prevailing market prices which may otherwise not be available given the low trading liquidity of the shares”.
The trading volume of Penguin shares has been low, with less than 0.005% of the total number of shares being traded over the last year.
But are the existing investors taking advantage of investor apathy to pick up a bargain in the face of an improving markets in both oil and gas and the offshore wind sector?
“The pickup in oil and gas activity, from exploration and production to decommissioning of rigs, is presenting opportunities to offshore support vessels (OSV) market players with oil prices remaining high,” Singapore investment bank UOB Kay Hian said in a recent report.
“Offshore wind in the Asia-Pacific region is also progressing ahead, with more large-scale projects forecasted and the APAC OSV market is expected to record a CAGR of over 7% from 2022 to 2027.
“While increasing demand typically leads to newbuilding, tight access to bank finance has led to limited possibility of newbuilds.
“This squeezes supply of available quality OSVs, which will drive further increases in charter rates and utilisation levels moving forward,” UOB Kay Hian added.
Penguin International is one of eleven shipyard groups listed on the SGX with a total market capitalisation of around $18bn.
The SGX has 50 maritime-related companies listed on the exchange with a total market valuation of around $22bn, according to a recent presentation.
However, Penguin may not be the only maritime company that may be about to delist from the SGX either by choice or by force.
Two major shareholders in Singapore offshore support vessel operator Atlantic Navigation Holdings recently stated that they are “exploring strategic options” for their stakes in the company.
Atlantic describes itself as an investment holding company, currently controls a fleet of 19 OSVs including lift-boats, anchor handling tug supply vessels, platform supply vessels, dive support vessels and crew boats.
Meanwhile, Singapore’s CH Offshore faces being delisted from the SGX after posting three consecutive years of financial losses.
If the company does meet the relevant requirements to exit the SGX watchlist within 36 months, it may be delisted or have its shares suspended with a view to a delisting.
