rh petrogas limited
TRANSCRIPT
CIRCULAR DATED 20 JULY 2012
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
This Circular is issued by RH Petrogas Limited (the “Company”). If you are in any doubt about its contents or the action you should take, you should consult your bank manager, stockbroker, solicitor, accountant or other professional independent adviser immediately.
If you have sold or transferred all your ordinary shares in the capital of the Company, please forward this Circular, the Notice of Extraordinary General Meeting and the attached Proxy Form immediately to the purchaser or to the bank, stockbroker or agent through whom the sale or transfer was effected, for onward transmission to the purchaser.
The Singapore Exchange Securities Trading Limited assumes no responsibility for the accuracy of any of the statements or opinions made, reports contained in this Circular.
The approval-in-principle of the SGX-ST is not to be taken as an indication of the merits of the Proposed Debt Conversion, the Proposed Placement, the Debt Conversion Shares, the Placement Shares, the Placement Warrants, the Warrants Shares, the Company and/or its subsidiaries.
RH PETROGAS LIMITED(Incorporated in the Republic of Singapore)
(Company Registration Number: 198701138Z)
CIRCULAR TO SHAREHOLDERS
in relation to
1. THE PROPOSED CONVERSION OF THE OUTSTANDING DEBTS AMOUNTING TO AN AGGREGATE OF US$61,531,637 OWING TO RH CAPITAL LIMITED, SHARPTONE INVESTMENTS LIMITED AND SURREYVILLE PTE LTD BY THE COMPANY INTO 157,455,957 NEW ORDINARY SHARES IN THE CAPITAL OF THE COMPANY AT THE ISSUE PRICE OF S$0.492 FOR EACH NEW ORDINARY SHARE; AND
2. THE PROPOSED ALLOTMENT AND ISSUE OF UP TO 262,292,000 PLACEMENT SHARES (WITH UP TO 87,431,000 WARRANTS) AT SUCH ISSUE PRICE TO BE DETERMINED BY THE BOARD OF DIRECTORS AT ITS DISCRETION WHICH SHALL NOT BE LESS THAN S$0.360 FOR EACH ORDINARY SHARE.
IMPORTANT DATES AND TIMES
Last date and time for lodgement of Proxy Form : 5 August 2012 at 9.30 a.m.
Date and time of Extraordinary General Meeting : 7 August 2012 at 9.30 a.m.
Place of Extraordinary General Meeting : 20 Harbour Drive PSA Vista #06-03 Singapore 117612
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CONTENTS
DEFINITIONS ..................................................................................................................................... 3
LETTER TO SHAREHOLDERS ......................................................................................................... 8
1. INTRODUCTION ...................................................................................................................... 8
2. THE PROPOSED DEBT CONVERSION ................................................................................. 8
3. THE PROPOSED PLACEMENT ............................................................................................. 12
4. RATIONALE ............................................................................................................................. 20
5. USE OF PROCEEDS ............................................................................................................... 22
6. FINANCIAL EFFECTS OF THE PROPOSED DEBT CONVERSION AND THE PROPOSED PLACEMENT ...................................................................................................... 22
7. SHAREHOLDING EFFECTS OF THE PROPOSED DEBT CONVERSION AND THE PROPOSED PLACEMENT ...................................................................................................... 25
8. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS ............................... 28
9. STATEMENT OF AUDIT COMMITTEE ................................................................................... 29
10. DIRECTORS’ RECOMMENDATION ........................................................................................ 29
11. EXTRAORDINARY GENERAL MEETING .............................................................................. 29
12. ACTION TO BE TAKEN BY SHAREHOLDERS ...................................................................... 29
13. DIRECTORS’ RESPONSIBILITY STATEMENT ...................................................................... 30
14. INSPECTION OF DOCUMENTS ............................................................................................. 30
APPENDIX A ..................................................................................................................................... 31
APPENDIX B ..................................................................................................................................... 38
NOTICE OF EXTRAORDINARY GENERAL MEETING .................................................................... 39
PROXY FORM
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DE FINITIONS
In this Circular, the following defi nitions apply throughout unless the context otherwise requires or unless otherwise stated:
“Act” or “Companies Act” : The Companies Act (Chapter 50) of Singapore, as amended or modifi ed from time to time
“Audit Committee” : The audit committee of the Company
“Associate” : (a) in relation to any Director, chief executive offi cer, Substantial Shareholder or Controlling Shareholder (being an individual) means:-
(i) his immediate family;
(ii) the trustees of any trust of which he or his immediate family is a benefi ciary or, in the case of a discretionary trust, is a discretionary object; and
(iii) any company in which he and his immediate family together (directly or indirectly) have an interest of 30% or more
(b) in relation to a Substantial Shareholder or a Controlling Shareholder (being a company) means any other company which is its subsidiary or holding company or is a Subsidiary of such holding company or one in the equity of which it and/or such other company or companies taken together (directly or indirectly) have an interest of 30% or more
“Assumed Exercise Price” : S$0.430 per Warrant Share which the Warrantholder will be entitled to subscribe, based on 20% premium to the Minimum Issue Price
“Authority” or “MAS” : The Monetary Authority of Singapore
“Board of Directors” or “Board” : The board of directors of the Company as at the Latest Practicable Date
“CDP” : The Central Depository (Pte) Limited
“Circular” : This circular to the Shareholders of the Company dated 20 July 2012
“CLSA” : CLSA Singapore Pte Ltd
“Code” : The Singapore Code on Take-overs and Mergers
“Company” : RH Petrogas Limited
“Completion” : The completion of either, (i) the Proposed Debt Conversion; or (ii) the Proposed Placement, as the case may be
Conversion Price : The conversion price of S$0.492 per Debt Conversion Share, which is based on the volume weighted average price of the Shares for trades done on the SGX-ST over a period of one month up to and including 18 May 2012, where available
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“Debt Conversion Deed” : The conditional debt conversion deed entered into between the Company with RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd dated 22 May 2012
“Debt Conversion Shares” : The new Shares in the capital of the Company to be issued and allotted at the Conversion Price (fractional entitlements to be disregarded) to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd in full repayment and discharge of the Outstanding Debts, pursuant to the Debt Conversion Deed
“Deed Poll” : The deed poll to be executed by the Company for the purpose of constituting the Placement Warrants and containing, inter alia, provisions for the protection of the rights and interests of the Warrantholders
“Determination Date” : The date on which the Issue Price and the number of Placement Shares and number of Placement Warrants (as the case may be) will be determined following a book-building process by agreement between the Board and the Sole Global Coordinator. A SGXNET announcement will be posted on the website www.sgx.com once the Determination Date has been agreed between the Sole Global Coordinator and the Board
“Directors” : The directors of the Company
“EGM” : Extraordinary General Meeting of the Company, to be held on 7 August 2012 at 9.30 a.m. (or any adjournment thereof)
“Enlarged Share Capital” : The issued share capital of the Company following either, (i) the allotment and issue of the Debt Conversion Shares; and/or (ii) the Placement Shares and full exercise of the Placement Warrants, as the case may be
“EPS” : Earnings per Share
“Exchange Rate” : The rate of US$1.00 : S$1.259 which is the average mid-price of the interbank exchange rates of US$ against S$ as published in the Business Times taken over a period of 5 Market Days, being 11, 14, 15, 16 and 17 May 2012
“Exercise Date” : The day on which the Placement Warrants may be exercised, being any Market Day during the Exercise Period
“Exercise Period” : The period commencing on and including the date of issue of the Placement Warrants and expiring at 5.00 p.m. on the date immediately preceding the fi rst anniversary of the date of issue of the Placement Warrants, subject to the terms and conditions of the Placement Warrants as set out in the Deed Poll and such period shall not be extendable
“Exercise Price” : The sum payable in respect of each Warrant Share to which the Warrantholder will be entitled to subscribe upon the exercise of a Placement Warrant which shall be up to 20% premium to the Issue Price and which shall be determined jointly by the Board and the Sole Global Coordinator following the bookbuilding process for the Proposed Placement
“FY” : Financial year of the Company ended or ending 31 December (as the case may be)
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“Group” : The Company and its Subsidiaries
“GST” : Goods and Services Tax
“Independent Directors” : The Directors who are considered independent for the purpose of making a recommendation to Shareholders on the Proposed Debt Conversion, namely, Dr Tan Jee-Theng Tony, Abbasbhoy Haider Nakhoda, Lee Hock Lye and Yeo Yun Seng Bernard
“Issue Price” : The price of each Placement Share, together with the Placement Warrant, to be allotted and issued to the Placees. The Issue Price shall be determined jointly by the Board and the Sole Global Coordinator following the bookbuilding process for the Proposed Placement and will be announced on the Determination Date
“Joint Bookrunners and : CLSA and Maybank KESJoint Placement Agents”
“KRL” : Kingworld Resources Limited
“Latest Practicable Date” : 6 July 2012, being the latest practicable date prior to the printing of this Circular
“Listing Manual” : The listing manual of the SGX-ST and its relevant rule(s)
“Market Day” : A day on which SGX-ST is open for securities trading
“Maybank KES” : Maybank Kim Eng Securities Pte. Ltd.
“MMBOE” : Million barrels of oil equivalent
“Minimum Issue Price” : S$0.360 per Placement Share, based on 20% discount to the volume weighted average price of the Shares for trades done on the SGX-ST on 16 May 2012
“NAV” : Net asset value
“NTA” : Net tangible assets
“Offer Information Statement” : The offer information statement to be issued by the Company and lodged with the Authority
“Outstanding Debts” : The interest-free shareholder’s loans and advances granted to the Company by RH Capital Limited and Surreyville Pte Ltd and outstanding debts owing by the Company to Sharptone Investments Limited, as the case may be, as explained under paragraph 2.1 of this Circular. As at the Latest Practicable Date, the total amount of the Outstanding Debts is US$61,531,637 based on the Exchange Rate and rounded to the nearest dollar
“PBL” : Petrogas (Basin) Ltd (formerly known as PearlOil (Basin) Ltd)
“PIL” : Petrogas (Island) Ltd (formerly known as PearlOil (Island) Ltd)
“Placee” : A person who subscribes to the Placement Shares
“Proposed Debt Conversion” : The proposed repayment of the aggregate amount of the Outstanding Debts by way of the issue and allotment of Debt Conversion Shares to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd
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“Proposed Placement” : The proposed allotment and issue of up to 262,292,000 Placement Shares with up to 87,431,000 Placement Warrants to the Placees
“Placement Shares” : Up to 262,292,000 new Shares to be offered by the Company pursuant to the Proposed Placement
“Placement Warrants” : Up to 87,431,000 detachable warrants, in registered form to be issued by the Company together with the Placement Shares pursuant to the Proposed Placement and (where the context so admits) such additional warrants as may be required or permitted to be issued by the Company pursuant to the terms of the Placement Warrants set out in the Deed Poll (any such additional warrants to rank pari passu with the warrants and for all purposes to form part of the same series), subject to the terms and conditions to be set out in the Deed Poll, each warrant entitling the Warrantholder to subscribe for one new Share at the Exercise Price on the Exercise Date, subject to the terms and conditions to be set out in the Deed Poll
“PRC” : People’s Republic of China
“PSC” : Production Sharing Contract
“Record Date” : In relation to any dividends, rights, allotments or other distributions, the date as at the close of business (or such other time as may have been notifi ed by the Company) on which Shareholders must be registered with the Company or with CDP, as the case may be, in order to participate in such dividends, rights, allotments or other distributions
“Register of Members” : Register of members of the Company
“Register of Warrantholders” : Register containing particulars of the Warrantholders and such other information relating to the Placement Warrants as the Company may require
“RSBBV” : RHP Salawati Basin BV (formerly known as Lundin Salawati Basin BV)
“RSIBV” : RHP Salawati Island BV (formerly known as Lundin Indonesia BV)
“Securities Account” : Securities account maintained by a securities account holder with CDP or a sub-account of a sub-account holder maintained with a Depository Agent
“SFA” : Securities and Futures Act, Chapter 289 of Singapore, as amended or modifi ed from time to time
“SGX-ST” : Singapore Exchange Securities Trading Limited
“Share(s)” : Ordinary share(s) in the share capital of the Company
“Shareholders” : The registered holders of the Shares in the register of members of the Company, except where the registered holder is CDP, the term “Shareholders” shall, in relation to such Shares and where the context so admits, mean the Depositors whose Securities Accounts are credited with such Shares
“Sole Global Coordinator” : CLSA
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“Warrant Agent” : Boardroom Corporate & Advisory Services Pte. Ltd.
“Warrantholders” : In relation to a Placement Warrant, a person for the time being registered in the Register of Warrantholders as the holder or joint holder of that Placement Warrant, except that where the registered holder is CDP and the context so admits, the Depositor whose Securities Account(s) is credited with such Placement Warrant
“Warrant Shares” : The new Shares to be issued by the Company upon the exercise of the Placement Warrants subject to and in accordance with the terms and conditions of the Placement Warrants to be set out in the Deed Poll
Currencies, Units of Measurements and Others
“S$” and “cents” : Singapore dollars and cents, respectively
“US$” and “US cents” : United States dollars and cents, respectively
“%” or “per cent.” : Per centum or percentage
The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the same meanings ascribed to them respectively in Section 130A of the Companies Act. The terms “Subsidiary” and “Substantial Shareholder” shall have the meaning ascribed to it in Sections 5 and 81 of the Companies Act respectively. The term “Controlling Shareholder” shall have the meaning ascribed to it in the Listing Manual.
Words importing the singular shall, where applicable, include the plural and vice versa, and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. References to persons shall include corporations.
Any reference in this Circular to any statute or enactment is a reference to that statute or enactment as for the time being amended or re-enacted. Any word or term defi ned under the Companies Act, the SFA, the Listing Manual or any statutory modifi cation thereof and used in this Circular shall, where applicable, have the meaning ascribed to it under the Companies Act, the SFA, the Listing Manual or any statutory modifi cation thereof, as the case may be, unless otherwise provided.
Any reference to any agreement or document shall include such agreement or document as amended, modifi ed, varied, novated, supplemented or replaced from time to time.
Any reference in this Circular to shares being allotted to a person includes allotment to CDP for the account of that person.
Any reference to a time of day and to dates in this Circular shall be a reference to Singapore time and dates, unless otherwise stated.
Any discrepancies in this Circular between the sum of the fi gures stated and the total thereof are due to rounding. Accordingly, fi gures shown as totals in this Circular may not be an arithmetic aggregation of the fi gures which precede them.
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LETTER TO SHAREHOLDERS
RH PETROGAS LIMITED(Incorporated in the Republic of Singapore)
(Company Registration Number: 198701138Z)
Directors Registered Offi ce
Tan Sri Datuk Sir Tiong Hiew King (Executive Chairman) 20 Harbour DriveDato’ Sri Dr Tiong Ik King (Executive Director) PSA Vista #06-03Dr Tan Jee-Theng Tony (Group CEO & Executive Director) Singapore 117612Tiong Kiew Chiong (Executive Director)Tiong Chiong Ee (Executive Director)Peter Ng Choong Joo @ Ng Chong Yu (Executive Director)Abbasbhoy Haider Nakhoda (Independent Non-Executive Director)Lee Hock Lye (Independent Non-Executive Director)Yeo Yun Seng Bernard (Independent Non-Executive Director) 20 July 2012
To: The Shareholders of RH Petrogas Limited
Dear Sir/Madam
1. INTRODUCTION
1.1 EGM
The Directors of the Company propose to convene the EGM to be held on 7 August 2012 to seek the approval of the Shareholders for the following proposals:-
(i) The Proposed Debt Conversion; and
(ii) The Proposed Placement.
1.2 Circular
The purpose of this Circular is to provide Shareholders with information relating to, and to explain the rationale for, the proposals set out in paragraph 1.1 above to be tabled at the EGM, and to seek Shareholders’ approval for such proposals at the EGM.
2. THE PROPOSED DEBT CONVERSION
2.1 Background
As announced on 27 December 2010, the Company has obtained a loan from RH Capital Limited for the sum of up to US$50.0 million, which together with bank borrowings was used to fund the acquisition of the entire issued and paid-up share capital of PBL, PIL, RSBBV and RSIBV. The principal terms of this shareholder’s loan are, inter alia, as follows:-
(a) interest-free;
(b) the maturity date of this shareholder’s loan was fi fteen months and could be extended by mutual agreement between the parties;
(c) this shareholder’s loan is to be repaid in either one lump sum or in instalments at the option of the Company on or before the maturity date and the Company has the sole option to make early repayment; and
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(d) a management fee of US$195,000 per quarter, payable quarterly in arrears until 31 December 2011 by the Company to RH Capital Limited, in consideration of the grant of this shareholder’s loan to the Company.
The aggregate amount of the management fees referred to in paragraph (d) above is US$780,000 being US$195,000 per quarter for four quarters from 1 January 2011 till 31 December 2011. As the transaction relating to the shareholder’s loan was entered on 27 December 2010, the aggregate amount of the management fees of US$780,000 represents approximately 4.52% of the Group’s NTA of S$22,464,000 as at 31 December 2009, being the latest available audited NTA prior to the entry of the transaction.
As the value of the transaction (taking into account the aggregate amount of the management fee payable under the shareholder’s loan) was less than 5% of the latest audited consolidated NTA of the Group, shareholders’ approval was not required for this shareholder’s loan for the purposes of Chapter 9 of the Listing Manual.
As further announced on 23 April 2012, the Company has obtained the agreement of RH Capital Limited to renew this shareholder’s loan for another twelve months until 31 March 2013, subject to, inter alia, the following principal terms:-
(a) the loan is interest-free;
(b) the maturity date of this shareholder’s loan is 31 March 2013 and can be extended by mutual agreement between the parties;
(c) this shareholder’s loan is to be repaid in either one lump sum or in instalments at the option of the Company on or before the maturity date and the Company has the sole option to make early repayment; and
(d) there is no management fee.
As the renewal of this shareholder’s loan is interest-free, the value of the interested person transaction is nil for the purpose of Chapter 9 of the Listing Manual. As such, Shareholders’ approval was not required for the renewal of this shareholder’s loan.
Prior to the Company’s diversifi cation into the business of oil and gas exploration and production, interest-free loans and advances had been extended by Surreyville Pte Ltd to the Company from time to time to fund the working capital requirements of the Group due to the weak fi nancial condition of the Group at that time as its electronics business was loss making and could not generate suffi cient cash fl ow then. As at the Latest Practicable Date, the amount owing by the Company to Surreyville Pte Ltd is S$4.52 million.
Pursuant to a sale and purchase agreement dated 18 August 2008 and as announced on the same date, the Company acquired KRL with the provision that the cash portion of the purchase price of S$20.0 million will be repaid by the Company to Sharptone Investments Limited, being the vendor of KRL at a later date when the Company has procured the necessary funding. As at the Latest Practicable Date, a balance purchase price of S$10.0 million (out of the aforesaid sum of S$20.0 million) remains unpaid by the Company.
As at the Latest Practicable Date, Sharptone Investments Limited holds 112,500,000 Shares (24.63%), while Surreyville Pte Ltd holds 202,889,486 Shares (44.41%) in the Company. Each of Sharptone Investments Limited and Surreyville Pte Ltd is a Controlling Shareholder of the Company. Tan Sri Datuk Sir Tiong Hiew King together with the Estate of Tiong Kiu King hold the entire issued share capital of Sharptone Investments Limited. Tan Sri Datuk Sir Tiong Hiew King together with Dato’ Sri Dr Tiong Ik King hold the entire issued share capital of Woodsville International Limited which is, in turn, the holding company of Surreyville Pte Ltd. RH Capital Limited is a company controlled by Tan Sri Datuk Sir Tiong Hiew King. Tan Sri Datuk Sir Tiong Hiew King is also the Company’s Executive Chairman.
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Based on the Debt Conversion Deed, the total amount of the Outstanding Debts is US$61,531,637 and it remains unchanged as at the Latest Practicable Date.
There are no other interested person transactions entered into, either with the Controlling Shareholders or any other interested person for the current FY ending 31 December 2012 up to the Latest Practicable Date.
2.2 Debt Conversion Deed
In an announcement dated 22 May 2012, the Company announced, inter alia, that it had entered into the Debt Conversion Deed with RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd for the Proposed Debt Conversion whereby the Company will issue an aggregate of 157,455,957 Debt Conversion Shares to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd as full and fi nal satisfaction of the Outstanding Debts.
2.3 Debt Conversion Shares
The Company proposes to settle the Outstanding Debts owing to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd in full by issuing an aggregate of 157,455,957 Debt Conversion Shares (fractional entitlements being disregarded) to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd at the Conversion Price.
The allotment and issue of the Debt Conversion Shares is subject to approval in-principle being granted by the SGX-ST for the listing and quotation of the same on the SGX-ST and approval of Shareholders for the Proposed Debt Conversion being obtained at the EGM.
The Debt Conversion Shares will be credited as fully paid-up and when allotted and issued will rank, pari passu, in all respects with the then existing Shares for any dividends, rights, allotments or other distributions, the Record Date for which falls on or after the date of issue of the Debt Conversion Shares.
The 157,455,957 Debt Conversion Shares will constitute approximately 34.47% of the existing issued share capital of the Company and approximately 25.63% of the Enlarged Share Capital of the Company.
2.4 Conditions Precedent
Completion of the Proposed Debt Conversion is conditional upon, inter alia, the fulfi lment of the following conditions precedent:
(i) approval-in-principle for the listing and quotation of the Debt Conversion Shares on the SGX-ST and, where such approval is subject to conditions, such conditions being acceptable to the Company and, to the extent that any conditions for the listing and quotation of the Debt Conversion Shares on the SGX-ST are required to be fulfi lled on or before the completion date for the Proposed Debt Conversion, they are so fulfi lled; and
(ii) the approval of the Shareholders of the Company being obtained in respect of the Proposed Debt Conversion.
On 25 June 2012, the SGX-ST granted in-principle approval for the listing and quotation of up to 157,455,957 Debt Conversion Shares, subject to the following:-
(a) compliance with the SGX-ST’s continuing listing requirements;
(b) Shareholders’ approval for the Proposed Debt Conversion; and
(c) a written undertaking from the Company that it will comply with Rule 723 of the Listing Manual.
The SGX-ST’s in-principle approval above is not to be taken as an indication of the merits of the Proposed Debt Conversion, the Debt Conversion Shares, the Company and/or its subsidiaries.
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2.5 Shareholders’ Approval
The allotment and issue of the Debt Conversion Shares requires the approval of Shareholders under Section 161 of the Companies Act and Rules 805(1) and 812(1) and (2) of the Listing Manual.
Rule 812(1) and (2) of the Listing Manual provides that an issue must not be placed to, inter alia, the issuer’s directors and substantial shareholders, the immediate family members of the directors and substantial shareholders, and corporations in whose shares the issuer’s directors and substantial shareholders have an aggregate interest of at least 10% unless specifi c shareholders’ approval is obtained for such placement and the directors and substantial shareholders abstain from voting on the resolution approving the placement.
Each of Sharptone Investments Limited (which is owned by Tan Sri Datuk Sir Tiong Hiew King together with the Estate of Tiong Kiu King) and Surreyville Pte Ltd (whose holding company, Woodsville International Limited, is owned by Tan Sri Datuk Sir Tiong Hiew King together with Dato’ Sri Dr Tiong Ik King) is a Controlling Shareholder of the Company and RH Capital Limited is controlled by Tan Sri Datuk Sir Tiong Hiew King, the Executive Chairman of the Company. Hence, each of RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd is a person within the restrictions of Rule 812(1) of the Listing Manual.
The Company has entered into the Debt Conversion Deed with RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd whereby RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd have agreed to convert the Outstanding Debts (totalling US$61,531,637) owed to them by the Company into 157,455,957 Debt Conversion Shares (fractional entitlements disregarded) at the Conversion Price, as repayment of the Outstanding Debts.
Rule 906 of the Listing Manual requires, inter alia, that an issuer obtains shareholders’ approval for any interested person transaction of a value equal to, or more than 5% of the group’s latest audited NTA. Based on the latest audited consolidated fi nancial statement of the Group, the Company’s consolidated net tangible liabilities value as at 31 December 2011 was US$30,044,000. Based on the foregoing, the Company would therefore be required to obtain the approval of the Shareholders for any interested person transaction that the Company may enter into, regardless of the value of such transaction. As the Proposed Debt Conversion constitutes an interested person transaction under Chapter 9 of the Listing Manual, it is subject to the approval of independent Shareholders in accordance with Rule 906 of the Listing Manual.
In addition, as the Debt Conversion Shares will be allotted and issued to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd (each being a Controlling Shareholder and/or an Associate of a Controlling Shareholder of the Company), approval of the Shareholders is required to be obtained in connection thereto.
Pursuant to Rule 921(4)(b) of the Listing Manual, the Audit Committee of the Company, after taking into consideration the rationale and the benefi t for the Proposed Debt Conversion, is of the opinion that the Proposed Debt Conversion and the proposed allotment and issue of the Debt Conversion Shares to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd are on normal commercial terms and are not prejudicial to the interests of the Company and its minority Shareholders. Accordingly, the Company is not required to appoint an independent fi nancial adviser to advise the Independent Directors as to whether the Proposed Debt Conversion is on normal commercial terms and is not prejudicial to the interests of the Company and its minority Shareholders. Dato’ Sri Dr Tiong Ik King, a member of the Audit Committee, had abstained from making any recommendations as he is deemed to be interested in the proposed allotment and issue of the Debt Conversion Shares to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd.
No other interested person transactions were entered into by the Company with the RH Capital Limited, Surreyville Pte Ltd, Sharptone Investments Pte Ltd or any other interested person for the current fi nancial year ending 31 December 2012 up to the Latest Practicable Date.
Accordingly, Shareholders’ approval is sought for the Proposed Debt Conversion.
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3. THE PROPOSED PLACEMENT
3.1 Background
On 22 May 2012, the Company announced that it has appointed CLSA as the Sole Global Coordinator and CLSA and Maybank KES as Joint Bookrunners and Joint Placement Agents, for the Proposed Placement. The Proposed Placement shall be carried out on the terms of and subject to the conditions of a placement agreement to be entered into between the Company, CLSA and Maybank KES (the “Placement Agreement”).
3.2 Structure of the Proposed Placement
The Proposed Placement will be structured as a package of shares and warrants comprising up to 262,292,000 Placement Shares with up to 87,431,000 Placement Warrants to be issued by the Company for subscription, so as to raise gross proceeds of approximately S$132.0 million in aggregate based on the Minimum Issue Price and assuming that all Placement Warrants will be exercised at the Assumed Exercise Price by Warrantholders. The basis of allotment of the Placement Warrants will be one Placement Warrant for up to every three Placement Shares to be subscribed by the Placees. A SGXNET announcement will be posted on the internet at the website www.sgx.com once the fi nal size and composition of the Proposed Placement is determined on the Determination Date.
After the lodgment of the Offer Information Statement with the Authority (subject to the Shareholders’ approval being obtained at the EGM), the Joint Bookrunners and Joint Placement Agents will conduct a book-building exercise. The Placement Shares together with the Placement Warrants shall be offered to institutional and other investors by way of book-building. The Joint Bookrunners and Joint Placement Agents will identify the Placees, following a bookbuilding process and will advise the Company of these persons. The Company will announce the Issue Price, the number of Placement Shares and number of Placement Warrants (as the case may be) after the completion of the book-building exercise in connection with the Proposed Placement.
Due to the current volatile market and oil price conditions, the Company is not able to determine the timeframe for the Completion of the Proposed Placement after the EGM. Nevertheless, to enable the Company to act quickly and take advantage of favourable market conditions at an appropriate time, the Company wishes to seek a shareholders’ mandate to authorise the Directors to issue and allot the Placement Shares and Placement Warrants (together with Warrant Shares arising from the exercise of the Placement Warrants) based on the principal terms set out in this Circular at this stage. The Company will provide updates on the Proposed Placement via SGXNET at the appropriate time. In the event that the Company is unable to complete the Proposed Placement within six months from shareholders’ approval obtained at the EGM, the Company will also provide an update on the progress of the Proposed Placement in its quarterly results announcement. The Company reserves the right not to proceed with the Proposed Placement in the event market conditions are not favourable to the Company.
Pursuant to the terms of the sale and purchase agreement dated 3 December 2009 in relation to the acquisition of Orchard Energy Pte. Ltd. (now known as RH Petrogas Singapore Pte. Ltd.) from Ellington Investments Pte. Ltd. (“Ellington”), the Company has committed to offer to Ellington a minimum of 5% and a maximum of 10% of the total number of new Shares to be issued for the purposes of raising funds in any private placement, provided that Ellington’s total shareholding in the Company does not exceed 5% of its enlarged share capital.
The Issue Price for the Placement Shares shall be determined after the bookbuilding exercise has been completed, but in any case, shall not be less than the Minimum Issue Price which is based on 20% discount to the volume weighted average price of the Shares for trades done on the SGX-ST on 16 May 2012. The Exercise Price shall be up to 20% premium to the Issue Price which shall be determined jointly by the Board and the Sole Global Coordinator following the bookbuilding process for the Proposed Placement.
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The Placement Warrants, when allotted and issued, will entitle the Placees to subscribe for one Warrant Share at the Exercise Price for each Warrant Share which shall be payable upon the exercise of the Placement Warrant. The Placement Warrants shall have an Exercise Period commencing from the date of issue of the Placement Warrants and expiring at 5.00 p.m. on the date immediately preceding the fi rst anniversary of the date of issue of the Placement Warrants.
The Placement Warrants shall be subject to such terms and conditions to be set out in the Deed Poll.
Assuming 262,292,000 Placement Shares are issued, the Placement Shares will constitute approximately 57.42% of the existing issued share capital of the Company and approximately 36.47% of the Enlarged Share Capital of the Company.
Assuming that the Placement Warrants are fully exercised and 87,431,000 Warrant Shares are issued, the Warrant Shares will constitute approximately 19.14% of the existing issued share capital of the Company and approximately 10.84% of the Enlarged Share Capital of the Company.
The Placement Shares and Warrant Shares, when allotted and issued, will rank pari passu in all respects with the then existing Shares for any dividends, rights, allotments or other distributions, the Record Date for which falls on or after the date of issue of the Placement Shares.
Accordingly, the allotment and issue of the Placement Shares and the Placement Warrants are subject to Shareholders’ approval pursuant to Section 161 of the Act and Rule 805 of the Listing Manual.
3.3 Principal terms and conditions of the Proposed Placement
(i) Principal terms of the Placement Shares
Number of Placement Shares
Up to 262,292,000 new Shares to be offered by the Company pursuant to the Proposed Placement
Basis of Allotment The Placement Shares are to be issued and allotted by the Company to the Placees pursuant to the terms and subject to the conditions of the Placement Agreement
Issue Price No less than S$0.360 (being the Minimum Issue Price) for each Placement Share payable in full by the Placees to the Company on the date of completion of the Placement Agreement, based on 20% discount to the volume weighted average price of the Shares for trades done on SGX-ST on 16 May 2012. The fi nal Issue Price shall be determined jointly by the Board and the Sole Global Coordinator following the bookbuilding process for the Proposed Placement and will be announced on the Determination Date
Estimated proceeds from placement of Placement Shares
Gross proceeds of approximately S$94.4 million, based on the issuance of 262,292,000 Placement Shares at the Minimum Issue Price of S$0.360 for each Placement Share
Status of the Placement Shares
The Placement Shares, when issued, allotted and fully paid, will rank pari passu in all respects with the then existing issued Shares for any dividends, rights, allotments or other distributions, the Record Date for which falls on or after the date of issue of the Placement Shares
Listing of the Placement Shares
In-principle approval for the listing of and quotation of, inter alia, the Placement Shares has been granted by the SGX-ST on 25 June 2012 subject to certain conditions, the details of which are set out in paragraph 3.3(iii) of this Circular
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Trading of the Placement Shares
Upon the listing of and quotation for the Placement Shares on the Main Board of the SGX-ST, the Placement Shares will be traded on the Main Board of the SGX-ST under the book-entry (scripless) settlement system . For the purposes of trading on the Main Board of the SGX-ST, each board lot of Shares will comprise 1,000 Shares
Governing Laws Laws of the Republic of Singapore
(ii) Principal terms of the Placement Warrants
Number of Placement Warrants
Up to 87,431,000 Placement Warrants to be issued together with the Placement Shares to the Placees
Basis of Allotment One Placement Warrant is to be issued together with up to every three Placement Shares subscribed by the Placees
Detachability and trading
Subject to compliance with the Listing Manual, the Placement Warrants will be detached from the Placement Shares on issue and are expected to be listed and traded on the Main Board of the SGX-ST
In the event that there are less than 100 Warrantholders, the SGX-ST may not grant permission for the listing of and quotation for the Placement Warrants due to an insuffi cient spread of holdings of the Placement Warrants to provide for an orderly market in the trading of the Placement Warrants, the Company shall nevertheless proceed and complete the Proposed Placement. Accordingly, in such an event, Warrantholders will not be able to trade their Placement Warrants on the SGX-ST. However, if a Warrantholder were to exercise his Placement Warrants in accordance with the Deed Poll, the Warrant Shares arising therefrom will be listed and quoted on the Offi cial List of the SGX-ST
Listing of the Warrant Shares
In-principle approval for the listing of and quotation for, inter alia, the Placement Warrants has been granted by the SGX-ST on 25 June 2012 subject to certain conditions, the details of which are set out in paragraph 3.3(iii) of this Circular
Form and subscription rights
The Placement Warrants will be issued in the registered form and will be constituted by the Deed Poll. Subject to the terms and conditions of the Placement Warrants to be set out in the Deed Poll, each Placement Warrant shall entitle the Warrantholder, at any time during the Exercise Period, to subscribe for one Warrant Share at the Exercise Price in force on the relevant exercise date
Exercise Price The Exercise Price shall be up to 20% premium to the Issue Price which shall be determined jointly by the Board and the Sole Global Coordinator following the bookbuilding process for the Proposed Placement. Based on the Minimum Issue Price, the Assumed Exercise Price per Warrant Share shall be S$0.430. The holder(s) of the Placement Warrants may elect to exercise the Placement Warrants at the Exercise Price
Estimated proceeds from exercise of Placement Warrants
Gross proceeds of approximately S$37.6 million assuming the issuance of 87,431,000 Placement Warrants at the Assumed Exercise Price of S$0.430 for each Warrant Share and the exercise of all Placement Warrants by the Warrantholders
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Exercise Period The Placement Warrants may be exercised at any time from and including the date of issue of the Warrants up to 5.00 p.m. on the date immediately preceding the fi rst anniversary of the date of issue of the Placement Warrants unless such date is a date on which the Register of Members is closed or is not a Market Day, in which event the Placement Warrants shall expire on the date prior to the closure of the Register of Members or the immediately preceding Market Day, as the case may be (but excluding such period(s) during which the Register of Warrantholders may be closed), subject to the terms and conditions of the Placement Warrants to be set out in the Deed Poll. Placement Warrants remaining unexercised at the expiry of the Exercise Period shall lapse and cease to be valid for any purpose. The right to exercise the Placement Warrants will not be extended beyond the Exercise Period
End of Exercise Period One month before the end of the Exercise Period, a notice of expiry will be sent to all Warrantholders and an announcement will be made
Mode of payment for exercise of Placement Warrants
Warrantholders who exercise their Placement Warrants must pay the Exercise Price by way of (a) a remittance in Singapore currency by banker’s draft or cashier’s order drawn on a bank operating in Singapore in favour of the Company; or (b) subject to the Placement Warrants being listed on the Main Board of the SGX-ST, by debiting the relevant Warrantholder’s CPF Investment Account with the specifi ed CPF Approved Bank for the credit of the Designated Account (each term as defi ned in the Deed Poll); or (c) subject to the Placement Warrants being listed on the Main Board of the SGX-ST, partly in the form of remittance and/or partly by debiting such Warrantholder’s CPF Investment Account with the CPF Approved Bank for the credit of the Designated Account
Adjustments The Exercise Price and/or the number of Placement Warrants to be held by each Warrantholder will, after their issue, be subject to adjustments under certain circumstances to be set out in the Deed Poll. Such circumstances include, without limitation, consolidation or subdivision of Shares, capitalisation issues, rights issues and certain capital distributions. Any additional Placement Warrants issued shall rank pari passu with the Placement Warrants issued under the Proposed Placement and will for all purposes form part of the same series. Any such adjustments shall (unless otherwise provided under the rules of the SGX-ST from time to time) be announced by the Company to the SGX-ST
Status of the Warrant Shares
The Warrant Shares, when issued and allotted upon exercise of the Placement Warrants, will rank pari passu in all respects with the then existing issued Shares for any dividends, rights, allotments or other distributions, the Record Date for which falls on or after the date of issue of the Warrant Shares
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Modifi cation of rights of Warrantholders
The Company may, without the consent of the Warrantholders but in accordance with the terms of the Deed Poll, effect any modifi cation to the terms of the Deed Poll including the terms and conditions of the Placement Warrants which, in the opinion of the Company is:-
(a) not materially prejudicial to the interests of the Warrantholders;
(b) of a formal, technical or minor nature;
(c) to correct a manifest error or to comply with mandatory provisions of Singapore law; or
(d) to vary or replace provisions relating to the transfer or exercise of the Placement Warrants including the issue of Warrant Shares arising from the exercise thereof or meetings of the Warrantholders in order to facilitate trading in or the exercise of the Placement Warrants or in connection with the implementation and operation of the book-entry (scripless) settlement system in respect of trades of the Company’s securities on the Main Board of the SGX-ST
Without prejudice to any provision of the Deed Poll, any material alteration in the terms and conditions of the Warrants to the advantage of the Warrantholders is subject to the approval of Shareholders except where the alterations are made pursuant to the terms and conditions as set out in the Deed Poll.
Transfer and transmission
The Placement Warrants shall be transferable in lots entitling Warrantholders to subscribe for whole number of Warrant Shares. A Placement Warrant may only be transferred in the manner prescribed in the terms and conditions of the Warrants to be set out in the Deed Poll, including, inter alia, the following:-
(a) Warrants registered in the name of CDP – where the Placement Warrants are registered in the name of CDP the Placement Warrants are to be transferred between Depositors, such Placement Warrants must be transferred in the Depository Register by CDP by way of book-entry;
(b) Lodgment of Warrant certifi cate(s) and transfer form(s) – a Warrantholder whose Placement Warrants are registered in his own name (the “Transferor”) shall lodge, during normal business hours in any business day at the specifi ed offi ce of the Warrant Agent, the Transferor’s Warrant certificate(s) together with a transfer form (the “Transfer Form”), duly completed and signed by and on behalf of the Transferor and the transferee and duly stamped in accordance with any law for the time being in force relating to stamp duty and accompanied by the fees and expenses to be set out in the Deed Poll provided that the Warrant Agent may dispense with requiring CDP to sign as transferee any Transfer Form for the transfer of the Placement Warrants to CDP; and
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(c) Deceased Warrantholder – the executors and administrators of a deceased Warrantholder shall be the only persons recognised by the Company and the Warrant Agent as having any title to the Placement Warrants registered in the name of a deceased Warrantholder. Such persons shall, on producing to the Warrant Agent such evidence as may be reasonably required by the Warrant Agent to prove their title and on completion of a Transfer Form and the payment of such fees and expenses to be set out in the Deed Poll, be entitled to be registered as a holder of the Placement Warrants or to make such transfer as the deceased holder could have made.
Winding-up Where there is a members’ voluntary winding-up of the Company (other than a winding-up for the purpose of reconstruction or amalgamation pursuant to a scheme of arrangement), the Warrantholders may elect to be treated as if they had immediately prior to the commencement of such winding-up exercised the Placement Warrants and had on such date been the holders of the Warrant Shares to which they would have become entitled pursuant to such exercise. The Company shall give notice to the Warrantholders in accordance with the terms and conditions to be set out in the Deed Poll of the passing of any such resolution within seven (7) days after the passing thereof
Subject to the foregoing, if the Company is wound up for any other reason, all Placement Warrants which have not been exercised at the date of the passing of such resolution for the winding-up of the Company shall lapse and cease to be valid for any purpose
Further issues Subject to the terms and conditions of the Placement Warrants to be set out in the Deed Poll, the Company shall be at liberty to issue Shares to Shareholders either for cash or as a bonus distribution and further subscription rights upon such terms and conditions as the Company sees fi t. However, the Warrantholders shall have no participation rights in any such issues of Shares by the Company unless otherwise resolved by the Company in general meeting
Warrant Agent Boardroom Corporate & Advisory Services Pte. Ltd.
Governing Law Laws of the Republic of Singapore
(iii) Conditions of the Proposed Placement
(A) The Joint Bookrunners and Joint Placement Agents will not offer the Placement Shares to, or procure subscription for or make an invitation in respect of the Placement Shares to or by any person who (to the best of the Joint Bookrunners’ and Joint Placement Agents’ knowledge, information and belief and after having made due and careful enquiries) falls within any of the following categories:-
(a) the Company’s Directors and Substantial Shareholders;
(b) immediate family members (as defi ned in the Listing Manual) of the Company’s Directors and Substantial Shareholders;
(c) Substantial Shareholders, related companies (as defined in Section 6 of the Companies Act), associated companies of the Company’s Substantial Shareholders;
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(d) corporations in whose shares the Company’s Directors and Substantial Shareholders have an aggregate interest of at least 10%; or
(e) any person who, in the opinion of the SGX-ST, falls within categories (a) to (d) above,
except for such person(s) who fulfi ls the criteria set out in Rule 812(3) of the Listing Manual.
Subject to Shareholders’ approval of the resolutions set out in the Notice of EGM attached to this Circular, the Company will be entering into the Placement Agreement with the Joint Bookrunners and Joint Placement Agents for the Proposed Placement.
(B) The Proposed Placement is expected to be completed, subject to, amongst other things, the following conditions being fulfi lled:-
(a) approval in-principle being received from the SGX-ST for the admission to the Main Board of the SGX-ST and for the dealing in and quotation of the Placement Shares, Placement Warrants and Warrant Shares and such approval not being revoked, rescinded or cancelled prior to the completion of the subscription; and
(b) the Company having received approval from its Shareholders at a general meeting for the Proposed Placement.
(C) On 25 June 2012, the SGX-ST granted in-principle approval for the listing and quotation of up to 262,292,000 Placement Shares, up to 87,431,000 Placement Warrants and up to 87,431,000 Warrant Shares arising from the exercise of the Placement Warrants, subject to the following:-
(a) compliance with the SGX-ST’s continuing listing requirements;
(b) Shareholders’ approval for the Proposed Placement;
(c) a written undertaking from the Company that it will comply with Rule 704(30) and Rule 1207(2) in relation to the use of proceeds from the Proposed Placement and the exercise of the Placement Warrants;
(d) a written undertaking from the Company that it will comply with Rule 723 of the Listing Manual;
(e) a written undertaking from the Company that it will comply with Rule 803 of the Listing Manual;
(f) a written confi rmation from the Company that it will not place the Placement Shares and Placement Warrants to persons prohibited under Rule 812(1) of the Listing Manual;
(g) a written undertaking from the Company that it will announce any adjustment made pursuant to Rule 829(1) of the Listing Manual;
(h) a written undertaking from the Company that it will comply with Rules 829(2), 829(3) and 831 of the Listing Manual; and
(i) a written confi rmation from the Placement Agent(s) that Placement Shares and Placement Warrants will not be placed out to persons prohibited under Rule 812(1) of the Listing Manual.
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Shareholders should note that the in-principle approval by the SGX-ST is not to be taken as an indication of the merits of the Proposed Placement, the Placement Shares, the Placement Warrants, the Warrants Shares, the Company and/or its Subsidiaries.
Pursuant to the Listing Manual, the SGX-ST normally requires a suffi cient spread of holdings to provide an orderly market in the securities and as a guide the SGX-ST expects at least 100 warrantholders for a class of company warrants. Shareholders should note that in the event that permission is not granted by the SGX-ST for the listing of and quotation for the Placement Warrants due to an insuffi cient spread of holdings of the Placement Warrants to provide for an orderly market in the trading of the Placement Warrants, the Company shall nevertheless proceed and complete the Proposed Placement. Accordingly, in such an event, Warrantholders will not be able to trade their Placement Warrants on the SGX-ST. However, if a Warrantholder were to exercise his Placement Warrants in accordance with the Deed Poll, the Warrant Shares arising therefrom will be listed and quoted on the Offi cial List of the SGX-ST.
3.4 Issue Details of the Placement Shares package
The Issue Price shall not be less than S$0.360 (being the Minimum Issue Price) for each Placement Share, based on 20% discount to the volume weighted average price of the Shares for trades done on SGX-ST on 16 May 2012.
The Issue Price, the number of Placement Shares, the number of Placement Warrants, the ratio of the number of Placement Warrants vis-à-vis the number of Placement Shares and the Exercise Price will be decided jointly by the Board and the Sole Global Coordinator following the bookbuilding process for the Proposed Placement.
Although the Shareholders’ approval is sought for the issuance of up to 262,292,000 Placement Shares and up to 87,431,000 Placement Warrants, there can, however, be no assurance that the Proposed Placement will be consummated or that the maximum number of Placement Shares or the maximum number of Placement Warrants will be issued. The Board shall have an absolute discretion and may not necessarily issue up to such number of Placement Shares depending on the then prevailing market conditions. In addition, the Board shall have an absolute discretion to decide of the ratio of the number of Placement Warrants vis-à-vis the number of the Placement Shares, taking into account the prevailing market conditions.
A SGXNET announcement will be posted on the internet at the website www.sgx.com once the Issue Price has been determined on the Determination Date. Allocation of the Placement Shares to Placees will be based on the Issue Price announced on the Determination Date.
3.5 Offer made using the Offer Information Statement
Section 277 of the SFA provides an exemption from compliance with Sub-Divisions (2) and (3) of the Division relating to offers of investments (other than Section 257 of the SFA) in the event that an offer of securities (not being such securities as may be prescribed by the Authority) issued by an entity whose shares are listed for quotation on a securities exchange, whether by means of a rights issue or otherwise, if:-
(a) in the case where the securities offered are units of shares or debentures, the shares or debentures are those of the entity that issued the units;
(b) the offer information statement relating to the offer which complies with such form and content requirement as may be prescribed by the Authority is lodged with the Authority; and
(c) the offer is made in or accompanied by the offer information statement referred to in paragraph (b).
The aforesaid shall apply to an offer of securities referred to therein only for a period of 6 months from the date of lodgment of the offer information statement relating to that offer.
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The Proposed Placement will be made pursuant to the exemption under Section 277 of the SFA. Accordingly, the Company will lodge the Offer Information Statement with the Authority after the approval of Shareholders for the Proposed Placement has been obtained at the EGM.
3.6 Shareholders’ Approval
On 25 April 2012, Shareholders authorised the Directors to issue new Shares (“Existing Mandate”), subject to certain limits prescribed by the Listing Manual. These limits specify that the number of new Shares and convertible instruments to be issued pursuant to the Existing Mandate shall not exceed, in the case of an issue otherwise than on a pro rata basis (such as a placement), 20% of the number of Shares in issue as at 25 April 2012. In addition, Rule 811 of the Listing Manual provides that (i) an issue of shares must not be priced at more than 10% discount to the weighted average price for trades done on the SGX-ST for the full market day on which the placement or subscription agreement is signed. If trading in the issuer’s shares is not available for a full market day, the weighted average price must be based on the trades done on the preceding market day up to the time the placement agreement is signed; and (ii) an issue of warrants or the convertibles securities must not be more than 10% discount to the prevailing market price, unless specifi c shareholders’ approval is obtained for the issue of shares, the warrants or other convertible securities.
Based on the allotment of 262,292,000 Placement Shares at the Minimum Issue Price of S$0.360 and the exercise of 87,431,000 Placement Warrants at the Assumed Exercise Price of S$0.430 assuming the Warrants are fully exercised, the Company expects to raise an aggregate gross proceeds of approximately S$132.0 million in aggregate pursuant to the Proposed Placement. The estimated gross proceeds of S$132.0 million is an indicative fi gure and assumes that the maximum number of Placement Shares will be issued at the Minimum Issue Price and all Placement Warrants issued pursuant to the Proposed Placement will be exercised at the Assumed Exercise Price by Warrantholders.
While the Board together with the Sole Global Coordinator will determine the exact structure of the Proposed Placement, including the fi nal number of Placement Shares, fi nal number of Placement Warrants, Issue Price and Exercise Price, closer to such offering, having regard to, among other things, market conditions at such time, the maximum number of Placement Shares and Placement Warrants to be issued pursuant to the Proposed Placement will exceed the limits under the Existing Mandate and the Issue Price and/or Exercise Price may exceed the discount permitted under Rule 811 of the Listing Manual described above. Accordingly, the Company is seeking the approval of Shareholders for the Proposed Placement.
4. RATIONALE
4.1 The Proposed Debt Conversion
The Proposed Debt Conversion is to facilitate the Company to raise capital for the repayment of the Outstanding Debts through the conversion of debt to equity. The issuance of the Debt Conversion Shares to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd will effect a full and fi nal settlement of all the Company’s obligations pursuant to the Outstanding Debts. This will signifi cantly reduce the immediate debt burden of the Group without adversely affecting its operating cash fl ow. Further, this will signifi cantly strengthen the Group’s balance sheet and free up debt capacity for future projects and improve its gearing ratio. Based on the latest audited consolidated fi nancial statements of the Company for the FY ended 31 December 2011 and assuming the maximum number of Placement Shares are allotted and issued at the Minimum Issue Price, the maximum number of Placement Warrants are issued and fully exercised at the Assumed Exercise Price and the Debt Conversion Shares are allotted and issued at the Conversion Price, the gearing ratio of the Group will improve from 104% to 20% and the NAV per Share of the Group will improve from 24.04 US cents to 28.17 US cents. With the strengthening of its balance sheet and the improvement in the gearing ratio, the Group will be in a better position to negotiate for more favourable fi nancing terms from fi nancial institutions with respect to its existing facilities and any additional facilities that may be required for business expansion.
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As at the Latest Practicable Date, the direct and indirect interest of Tan Sri Datuk Sir Tiong Hiew King in the Company was 69.17% and the free fl oat of the Company was approximately 23%. Upon the completion of the Proposed Debt Conversion, Proposed Placement and full exercise of the Placement Warrants, Tan Sri Datuk Sir Tiong Hiew King shall remain the largest single Shareholder of the Company and his direct and indirect interest in the Company is expected to remain at above 51% through the Proposed Debt Conversion. By seeking to maintain his level of interest at above 51% in the Company through the Proposed Debt Conversion, the existing majority Shareholders demonstrate their confi dence in the growth prospects and plans of the Company and their continuing commitment to supporting the Company as it takes on the added business risks with its greater focus and investment in the energy sector. Further, after the completion of the Proposed Debt Conversion, the Proposed Placement and full exercise of the Placement Warrants and based on the assumptions as set out in paragraph 7.2 of this Circular, the free fl oat of the Company is expected to be expanded to approximately 45%. With a higher free fl oat, there will be greater participation by investors and broadening of the shareholder base which may increase the trading and liquidity of the Shares. Please refer to the Appendix B of this Circular for information on the trading volume of the Shares over the last 12 months immediately preceding the Latest Practicable Date.
4.2 The Proposed Placement
The Group is engaged in exploration, development and production of oil and gas resources. Currently, the Group has a portfolio of four PSC assets in Indonesia and the PRC, all of which will require signifi cant capital expenditure and working capital to develop the resources in these assets. Please refer to Section B at the Appendix A of this Circular for further information on the Group’s PSC assets.
As part of its strategy to acquire oil and gas assets, the Group has been actively evaluating various oil and gas opportunities. With an increased capital base after the Proposed Placement and using a combination of new equity and debt, the Group will be better positioned to pursue such opportunities. In addition, the Group will selectively evaluate strategic assets with exploration potential. Please refer to Sections C and D of the Appendix A of this Circular for further information on the Group’s competitive strengths and business strategies, respectively.
Having regard to the above, the Directors believe that the Proposed Placement will enable the Company to raise capital for the development of the Company’s current fi elds, acquisitions and working capital. The Proposed Placement will enable the Company to be in a better strategic position to consolidate the Company’s fi nancial resources to ensure long-term sustainability of the Company as the Group continues to explore more opportunities to strengthen its position in the energy sector.
In addition, the Proposed Placement will enable the Company to diversify its shareholding base and give it the opportunity to raise capital from institutional and other investors. After the completion of the Proposed Debt Conversion, the Proposed Placement and full exercise of the Placement Warrants and based on the assumptions as set out in paragraph 7.2 of this Circular, the free fl oat of the Company is expected to be expanded to approximately 45%. With a higher free fl oat, there will be greater participation by investors and broadening of the shareholder base which may increase the trading and liquidity of the Shares. Please refer to the Appendix B of this Circular for information on the trading volume of the Shares over the last 12 months immediately preceding the Latest Practicable Date.
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5 . USE OF PROCEEDS
Based on the Minimum Issue Price and assuming 262,292,000 Placement Shares are issued, the estimated net proceeds, after deducting expenses of approximately S$5.8 million pertaining to the Proposed Placement, is estimated to be S$88.7 million. The Company intends to apply the net proceeds from the Proposed Placement in the estimated proportions for the following purposes:-
Purpose As a % of net proceeds raised
Development of the Group’s oil and gas projects as described in paragraph 4.2 of this Circular
60 to 80
Investments, acquisitions and joint ventures relating to oil and gas resource projects
10 to 30
General working capital 10
As the Placement Warrants are issued as part of the placement package comprising shares and warrants, there will be no proceeds from the issue of the Placement Warrants. Assuming that the Placement Warrants are fully exercised and Warrant Shares are issued, the net proceeds arising therefrom of S$37.5 million shall be used for investments, acquisitions and joint ventures relating to oil and gas resource projects and general working capital purposes.
Pending the specifi c deployment of funds, the proceeds may be placed as deposits with fi nancial institutions or added to the working capital or used to reduce bank borrowings or used for investment in short-term money market instruments as may be determined by the Board in their absolute discretion.
The Company will make periodic announcements on the use of proceeds from the Proposed Placement when materially disbursed and to provide a status report on the use of proceeds in its annual report(s).
There is no minimum amount, which in the reasonable opinion of the Directors, must be raised by the Proposed Placement.
6. FINANCIAL EFFECTS OF THE PROPOSED DEBT CONVERSION AND THE PROPOSED PLACEMENT
For illustrative purposes only and based on the latest audited consolidated fi nancial statements of the Company for the FY ended 31 December 2011, assuming the maximum number of Placement Shares are allotted and issued at the Minimum Issue Price and the maximum number of Placement Warrants are issued and fully exercised at the Assumed Exercise Price, the fi nancial effects of the Proposed Debt Conversion and the Proposed Placement on the Company and the Group are set out below.
The analysis below has been prepared solely for illustrative purposes and does not purport to be indicative or a projection of the results and fi nancial position of the Company and the Group after completion of the Proposed Debt Conversion and the Proposed Placement.
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6.1 NAV
For illustrative purposes only, the fi nancial effects of the Proposed Debt Conversion and the Proposed Placement on the NAV of the Group, assuming that the Proposed Debt Conversion and the Proposed Placement have been completed at the end of FY2011 are as follows:-
NAV(US$’000)
for FY2011No. of Shares
for FY2011
NAV per Share (US cents) for FY2011
Before adjusting for the Proposed Debt Conversion(1) 109,828 456,821,443 24.04
After adjusting for the Proposed Debt Conversion(2) 171,320 614,277,400 27.89
After adjusting for the Proposed Debt Conversion and the Proposed Placement(3)
233,223 876,569,400 26.61
After adjusting for the Proposed Debt Conversion, the Proposed Placement and assuming the exercise of all the Placement Warrants(4)
271,541 964,000,400 28.17
Notes:-
(1) Computed based on NAV as at 31 December 2011 and the issued share capital of 456,821,443 ordinary shares as at 31 December 2011.
(2) Computed based on NAV as at 31 December 2011, adjusted for the Proposed Debt Conversion and the issued share capital of 614,277,400 ordinary shares, after taking into account the issuance of 157,455,957 Debt Conversion Shares.
(3) Computed based on NAV as at 31 December 2011, adjusted for the Proposed Debt Conversion and net proceeds from the Placement Shares of US$70,384,000 less estimated fair value of warrant derivative liability of US$8,481,000 at the end of FY2011 as a result of the Placement Warrants, and the issued share capital of 876,569,400 ordinary shares, after taking into account the issuance of 157,455,957 Debt Conversion Shares and 262,292,000 Placement Shares.
(4) Computed based on NAV as at 31 December 2011, adjusted for the Proposed Debt Conversion and net proceeds from the Placement Shares and the Warrant Shares of US$100,221,000, and the issued share capital of 964,000,400 ordinary shares, after taking into account the issuance of 157,455,957 Debt Conversion Shares and 262,292,000 Placement Shares and 87,431,000 Warrant Shares.
6.2 EPS
For illustrative purposes only, the fi nancial effects of the Proposed Debt Conversion and the Proposed Placement on the EPS of the Group, assuming that the Proposed Debt Conversion and the Proposed Placement have been completed at the beginning of FY2011 are as follows:-
Basic Diluted
Earnings(US$’000)
for FY2011
No. of Shares for
FY2011
EPS(US cents) for FY2011
No. of Shares for
FY2011
EPS(US cents) for FY2011
Before adjusting for the Proposed Debt Conversion(1)
2,932 456,268,018 0.64 457,700,643 0.64
After adjusting for the Proposed Debt Conversion(2)
2,932 613,723,975 0.48 615,156,600 0.48
After adjusting for the Proposed Debt Conversion and the Proposed Placement(3)
2,892 876,015,975 0.33 910,355,685 0.32
After adjusting for the Proposed Debt Conversion, the Proposed Placement and assuming the exercise of all the Placement Warrants(4)
2,892 963,446,975 0.30 964,879,600 0.30
24
Notes:
(1) Basic EPS - Computed based on weighted average number of ordinary shares of 456,268,018 as at 31 December 2011, after taking into account the issue of 1,000,000 new ordinary shares in July 2011.
Diluted EPS - Computed based on weighted average number of ordinary shares of 457,700,643 after taking into account the effects of dilution arising from the share options issued under RHP Share Option Scheme 2011 that are outstanding as of 18 May 2012, which have been assumed to be issued at the beginning of FY2011.
(2) Basic EPS - Computed based on weighted average number of ordinary shares of 613,723,975, after taking into account the issue of 1,000,000 new ordinary shares in July 2011 and the issuance of 157,455,957 Debt Conversion Shares.
Diluted EPS - Computed based on weighted average number of ordinary shares of 615,156,600, after taking into account the issue of 1,000,000 new ordinary shares in July 2011, the issuance of 157,455,957 Debt Conversion Shares and the effects of dilution arising from the share options issued under RHP Share Option Scheme 2011 that are outstanding as of 18 May 2012, which have been assumed to be issued at the beginning of FY2011.
(3) Basic EPS - Computed based on weighted average number of ordinary shares of 876,015,975, after taking into account the issue of 1,000,000 new ordinary shares in July 2011, the issuance of 157,455,957 Debt Conversion Shares and 262,292,000 Placement Shares and after deducting expenses related to the issuance of Placement Warrants.
Diluted EPS - Computed based on weighted average number of ordinary shares of 910,355,685, after taking into account the issue of 1,000,000 new ordinary shares in July 2011, the issuance of 157,455,957 Debt Conversion Shares, and 262,292,000 Placement Shares, the effects of dilution arising from the Placement Warrants and the share options issued under RHP Share Option Scheme 2011 that are outstanding as of 18 May 2012, which have been assumed to be issued at the beginning of FY2011 and after deducting expenses related to the issuance of Placement Warrants.
(4) Basic EPS - Computed based on weighted average number of ordinary shares of 963,446,975, after taking into account the issue of 1,000,000 new ordinary shares in July 2011, the issuance of 157,455,957 Debt Conversion Shares, 262,292,000 Placement Shares and 87,431,000 Warrant Shares and after deducting expenses related to the issuance of Placement Warrants.
Diluted EPS - Computed based on weighted average number of ordinary shares of 964,879,600, after taking into account the issue of 1,000,000 new ordinary shares in July 2011, the issuance of 157,455,957 Debt Conversion Shares, 262,292,000 Placement Shares, and 87,431,000 Warrant Shares, the effects of dilution arising from the share options issued under RHP Share Option Scheme 2011 that are outstanding as of 18 May 2012, which have been assumed to be issued at the beginning of FY2011 and after deducting expenses related to the issuance of Placement Warrants.
6.3 Gearing
For illustrative purposes only, the fi nancial effects of the Proposed Debt Conversion and the Proposed Placement on the gearing of the Group, assuming that the Proposed Debt Conversion and the Proposed Placement have been completed at the end of FY2011 are as follows:-
Net Debt (US$’000)
Total Equity (US$’000)
Gearing(1)
(times)
Before adjusting for the Proposed Debt Conversion 114,555 109,828 1.04
After adjusting for the Proposed Debt Conversion 53,023 171,320(2) 0.31
After adjusting for the Proposed Debt Conversion and the Proposed Placement
53,023 233,223(3) 0.23
After adjusting for the Proposed Debt Conversion, the Proposed Placement and assuming the exercise of all the Placement Warrants
53,023 271,541(4) 0.20
Notes:
(1) Gearing means the ratio of net debt to equity attributable to the owners of the parent. Net debt means the aggregate amount of liabilities arising from banks and fi nancial institutions, shareholder loans, trade and other payables and other liabilities, less cash and cash equivalents.
(2) Computed based on equity attributable to the owners of the Company as at 31 December 2011, adjusted for the Proposed Debt Conversion.
25
(3) Computed based on equity attributable to the owners of the Company as at 31 December 2011, adjusted for the Proposed Debt Conversion and net proceeds from the Placement Shares less estimated fair value of warrant derivative liability at the end of FY2011 as a result of the Placement Warrants.
(4) Computed based on equity attributable to the owners of the Company as at 31 December 2011, adjusted for the Proposed Debt Conversion and net proceeds from the Placement Shares and the Warrant Shares.
7. SHAREHOLDING EFFECTS OF THE PROPOSED DEBT CONVERSION AND THE PROPOSED PLACEMENT
7.1 Share Capital
The effects of the Proposed Debt Conversion and the Proposed Placement on the share capital of the Company are as follows:-
No. of Shares US$’000
Existing Issued and paid-up share capital(1) 456,821,443 138,201
Issue of Debt Conversion Shares pursuant to the Proposed Debt Conversion
157,455,957 61,492
After the Proposed Debt Conversion 614,277,400 199,693
Issue of the Placement Shares 262,292,000 70,424
Issued and paid-up share capital immediately after the Proposed Debt Conversion and the Proposed Placement
876,569,400 270,117
Issue of the Warrants Shares assuming the exercise of all Placement Warrants
87,431,000 29,837
Enlarged issued and paid-up share capital 964,000,400 299,954
Note:
(1) Based on the issued share capital of 456,821,443 ordinary shares as at 31 December 2011.
7.2 Shareholding Structure
The shareholding structure of the Directors and Substantial Shareholders of the Company before the Proposed Debt Conversion and the Proposed Placement is set out in Section 8.1 of this Circular.
Shareholders should note that the numerical values set out below are purely for illustrative purposes only and are not refl ective of the fi nal number of Placement Shares, the fi nal number of Placement Warrants, the Issue Price and the Exercise Price all of which will be determined closer to the offering, having regard to, among other things, market conditions at such time. Further, the Directors have full discretion in deciding the total number of Placement Shares, up to the maximum number of Placement Shares set out in this Circular and Placement Warrants, up to the maximum number of Placement Warrants set out in this Circular to be issued pursuant to the Proposed Placement. In this regard, there is no intention for the Company to issue such number of Placement Shares and Placement Warrants resulting in the aggregate shareholdings of the Controlling Shareholders falling below 51% of the total issued share capital of the Company to facilitate the compliance with the terms and conditions of banking facilities extended to the Group. The Directors shall have the discretion to adjust the size of the Proposed Placement to any number within the maximum number of Placement Shares and Placement Warrants as set out in this Circular, taking into account various matters including the Issue Price, Exercise Price and market conditions at that time, in order to manage the dilution to the Controlling Shareholders’ interests after the Proposed Debt Conversion, the Proposed Placement and assuming the exercise of all Placement Warrants such that the Controlling Shareholders’ interests do not fall below 51% of the total issued share capital of the Company.
26
As an illustration of the changes to the shareholding structure of the Company after the Proposed Debt Conversion and the Proposed Placement, the table of shareholding information set out below has been prepared purely for illustration only based on the following basis and assumptions:-
(i) The issue of 127,947,154 Debt Conversion Shares to RH Capital Limited at the Conversion Price of S$0.492;
(ii) The issue of 20,325,203 Debt Conversion Shares to Sharptone Investments Limited at the Conversion Price of S$0.492;
(iii) The issue of 9,183,600 Debt Conversion Shares to Surreyville Pte Ltd at the Conversion
Price of S$0.492;
(iv) Assuming the issue of 230,305,000 Placement Shares at the Issue Price of S$0.410;
(v) Assuming the issue of 76,769,000 Warrants Shares at the Exercise Price of S$0.490; and
(vi) Assuming that none of the outstanding share options granted to selected employees and Directors of the Group to subscribe for an aggregate of 2,397,000 Shares at an exercise price of S$0.590 per Share and 2,345,000 Shares at an exercise price of S$0.370 per Share pursuant to the RHP Share Option Scheme 2011 are exercised.
2727
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bank
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Cap
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127,
947,
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100
921,
351,
400
100
28
8 . INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS
8 .1 Interests in the Company
The interests of the Directors and Substantial Shareholders in the capital of the Company as at the Latest Practicable Date are as follows:-
Direct Interest Deemed Interest
No. of Shares %(7) No. of Shares %(7)
Directors
Tan Sri Datuk Sir Tiong Hiew King(1) 580,000 0.13 315,389,486 69.04
Dato’ Sri Dr Tiong Ik King(2) – – 202,889,486 44.41
Dr Tan Jee-Theng, Tony(3) 1,200,000 0.26 220,000 0.05
Tiong Kiew Chiong(4) – – 5,005,000 1.10
Tiong Chiong Ee – – – –
Peter Ng Choong Joo @ Ng Chong Yu 30,000 0.007 – –
Abbasbhoy Haider Nakhoda – – – –
Lee Hock Lye – – – –
Yeo Yun Seng Bernard – – – –
Substantial Shareholders (other than Directors)
Surreyville Pte Ltd 202,889,486 44.41 – –
Woodsville International Limited(1) – – 202,889,486 44.41
Sharptone Investments Limited 112,500,000 24.63 – –
The Estate of Tiong Kiu King, Deceased(5) – – 112,500,000 24.63
Maybank Kim Eng Securities Pte. Ltd. 30,984,000 6.78 – –
Maybank Kim Eng Holdings Limited(6) – – 30,984,000 6.78
Maybank IB Holdings Sdn. Bhd. (formerly known as Mayban IB Holdings Sdn. Bhd.)(6)
– – 30,984,000 6.78
Malayan Banking Berhad(6) – – 30,984,000 6.78
Notes:
(1) Tan Sri Datuk Sir Tiong Hiew King’s aggregate deemed interest of 315,389,486 shares comprised of (i) 202,889,486 shares held by Surreyville Pte Ltd (“Surreyville”), which arises from his shareholding in Woodsville International Limited, the holding company of Surreyville; and (ii) 112,500,000 shares held by Sharptone Investments Limited (“Sharptone”), which arises from his shareholding in Sharptone.
(2) Dato’ Sri Dr Tiong Ik King’s deemed interest arises from his shareholding in Woodsville International Limited, the holding company of Surreyville.
(3) Dr Tan Jee-Theng, Tony is deemed to be interested in the 220,000 ordinary shares registered in the name of HL Bank Nominees (S) Pte. Ltd.
(4) Tiong Kiew Chiong’s shareholdings in the Company is registered in the name of Citibank Nominees Singapore Pte Ltd.
(5) The Estate of Tiong Kiu King, Deceased’s deemed interest arises from his shareholding in Sharptone.
(6) These companies are deemed to be interested in the 30,984,000 Shares held by Maybank Kim Eng Securities Pte. Ltd. by virtue of Section 7 of the Companies Act.
(7) Computed based on the total issued share capital of 456,821,443 Shares.
8.2 Interests in the Proposed Debt Conversion and the Proposed Placement
Each of Tan Sri Datuk Sir Tiong Hiew King and Dato’ Sri Dr Tiong Ik King is deemed to be interested in the proposed allotment and issue of the Debt Conversion Shares to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd.
Save as disclosed above, none of the Directors or Substantial Shareholders of the Company has any interest, direct or indirect, in the Proposed Debt Conversion and the Proposed Placement.
29
9. STATEMENT OF AUDIT COMMITTEE
The Audit Committee of the Company, after taking into consideration the rationale and the benefi t for the Proposed Debt Conversion and the proposed allotment and issue of the Debt Conversion Shares to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd, is of the opinion that the Proposed Debt Conversion and the proposed allotment and issue of the Debt Conversion Shares to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd are on normal commercial terms and are not prejudicial to the interests of the Company and its minority Shareholders.
Dato’ Sri Dr Tiong Ik King, a member of the Audit Committee, had abstained from making any recommendations as he is deemed to be interested in the proposed allotment and issue of the Debt Conversion Shares to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd.
10. DIRECTORS’ RECOMMENDATION
The Independent Directors, having fully considered the rationale of the Proposed Debt Conversion, are of the view that the Proposed Debt Conversion is in the interests of the Company and that the same is transacted on normal commercial terms and is not prejudicial to the interest of the Company and its minority Shareholders. Accordingly, the Independent Directors recommend that Shareholders vote in favour of the Ordinary Resolution 1 set out in the Notice of EGM to be proposed at the EGM.
The Directors, having fully considered the rationale of the Proposed Placement, are of the view that the proposed transaction are in the interests of the Company. Accordingly, the Directors recommend that Shareholders vote in favour of the Ordinary Resolution 2 set out in the Notice of EGM to be proposed at the EGM.
11. EXTRAORDINARY GENERAL MEETING
The EGM, notice of which is set out on page 39 of this Circular, will be held at 20 Harbour Drive, PSA Vista #06-03, Singapore 117612 on Tuesday, 7 August 2012 at 9.30 a.m. for the purpose of considering and, if thought fi t, passing with or without modifi cations, the ordinary resolutions set out in the Notice of EGM.
Shareholders should note that the passing of the resolutions contained within this Circular are not inter-conditional, but are separate and independent from each other.
1 2. ACTION TO BE TAKEN BY SHAREHOLDERS
(a) Tan Sri Datuk Sir Tiong Hiew King (who is the Executive Chairman of the Company) together with the Estate of Tiong Kiu King hold the entire issued share capital of Sharptone Investments Limited. Tan Sri Datuk Sir Tiong Hiew King together with Dato’ Sri Dr Tiong Ik King (who is the Executive Director of the Company) hold the entire issued share capital of Woodsville International Limited which is, in turn, the holding company of Surreyville Pte Ltd. RH Capital Limited is a company controlled by Tan Sri Datuk Sir Tiong Hiew King. Tiong Kiew Chiong and Tiong Chiong Ee are relatives of Tan Sri Datuk Sir Tiong Hiew King and Dato’ Sri Dr Tiong Ik King, while Peter Ng Choong Joo @ Ng Chong Yu is an employee of certain entities (other than the Group) controlled by Tan Sri Datuk Sir Tiong Hiew King. Accordingly, Tan Sri Datuk Sir Tiong Hiew King, Dato’ Sri Dr Tiong Ik King, Tiong Kiew Chiong, Tiong Chiong Ee and Peter Ng Choong Joo @ Ng Chong Yu will abstain and shall ensure that their associates will abstain from voting on the Ordinary Resolution 1 relating to the Proposed Debt Conversion.
30
(b) Tan Sri Datuk Sir Tiong Hiew King, Dato Sri Dr Tiong Ik King, Tiong Kiew Chiong, Tiong Chiong Ee and Peter Ng Choong Joo @ Ng Chong Yu shall also decline, and shall procure that their associates also decline, to accept appointment as proxies for any Shareholder to vote in respect of each of the said Ordinary Resolution 1 unless the Shareholder concerned shall have given instructions in his proxy form as to the manner in which the votes are to be cast in respect of Ordinary Resolution 1.
(c) Shareholders who are unable to attend the EGM and wish to appoint a proxy to attend and vote at the EGM on their behalf must complete, sign and return the Proxy Form attached to this Circular in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at 20 Harbour Drive, PSA Vista #06-03 Singapore 117612 not less than 48 hours before the time fi xed for the EGM. The completion and return of a Proxy Form by a Shareholder does not preclude him from attending and voting in person at the EGM should he subsequently decide to do so, although the appointment of the proxy shall be deemed to be revoked by such attendance.
(d) A Depositor shall not be regarded as a shareholder of the Company entitled to attend the EGM and to speak and vote thereat unless his name appears on the Depository Register at least 48 hours before the EGM.
1 3. DIRECTORS’ RESPONSIBILITY STATEMENT
The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Circular and confi rm after making all reasonable enquiries that, to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the Proposed Debt Conversion and the Proposed Placement, the Company and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this Circular misleading. Where information in the circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in the Circular in its proper form and context.
14. INSPECTION OF DOCUMENTS
The following documents are available for inspection at the registered offi ce of the Company at 20 Harbour Drive, PSA Vista #06-03, Singapore 117612 during normal business hours from the date of this Circular up to the date of the EGM:
(a) the Memorandum and Articles of Association of the Company; (b) the Annual Report of the Company for FY2011; and
(c) the Debt Conversion Deed;
Yours faithfully
For and on behalf of the Board of Directors
Tan Sri Datuk Sir Tiong Hiew King Executive Chairman
31
APPENDIX A
INFORMATION ON THE COMPANY
A. Corporate History
The Company was formerly known as “Tri-M Technologies (S) Limited” during which time the Company was engaged in the business of manufacturing high quality electronics products for the global markets. In August 2009, the Company completed the acquisition of all the ordinary shares representing 100% of the total issued share capital of KRL.
At the time of acquisition of KRL by the Company, KRL had the right to develop and produce crude oil from the Fuyu-1 Block in the Songliao Basin, Jilin Province, the PRC pursuant to the petroleum production sharing contract made with China National Petroleum Corporation (“CNPC”) dated 12 November 2007. Following the completion of the acquisition of KRL, the Company diversifi ed its business into the development and production of oil and gas resources for sale.
In November 2009, the Company’s name was changed to “RH Petrogas Limited” in order to refl ect its new core business in oil and gas. In October 2010, the Company completed the divestment of its electronic business which marked its transformation into an oil and gas company.
In June 2010, the Group acquired 100% equity interest in RH Petrogas Singapore Pte. Ltd. (formerly known as Orchard Energy Pte. Ltd.). Orchard Energy Pte. Ltd. has a 94% working interest in a production sharing contract in West Belida Block, Jambi, South Sumatra, Indonesia through one of its subsidiaries.
In September 2010, the Group signed a share purchase agreement to acquire 100% equity interest in RSBBV and RSIBV. RSBBV holds 25.9360% working interest in the Kepala Burung PSC (“Basin PSC”) and RSIBV holds 14.5122% working interest in the Salawati Kepala Burung PSC (“Island PSC”). Later in the same month, the Group signed another share purchase agreement to acquire 100% equity interests in PBL and PIL. PBL holds 34.0640% working interest in Basin PSC and PIL holds 18.7020% working interest in Island PSC. As a result, the Group holds an aggregate 60% working interest in the Basin PSC and 33.2142% working interest in the Island PSC.
The Company is an independent upstream oil and gas company headquartered in Singapore.
B. Business Overview
As at the Latest Practicable Date, the Group has four PSC assets, namely Basin PSC, Island PSC and West Belida PSC in Indonesia and Fuyu-1 PSC in the PRC. A brief summary of the Group’s oil and gas assets are set out below:-
Basin and Island PSCs in Indonesia
The Group holds a total of 60% working interest in the Basin PSC and 33.2142% in the Island PSC. The Basin and Island PSCs are two contiguous blocks located in the ‘Birds Head’ area of West Papua, Indonesia, occupying a total area of approximately 2,000 sq km onshore and offshore. The assets are primarily oil-weighted with oil and gas production from two PSCs averaging around 4,600 barrels of oil equivalent per day (95% being oil) in 2011 net to the Group’s working interests. Both PSCs have long history of production and total cumulative production to date is around 360 MMBOE. These reserve numbers included the Indonesian Government’s profi t share of production under the terms of the PSCs.
Over the last decade, production in the Basin and Island PSCs has sustained at a relatively stable level through exploration discoveries, in-fi ll development drillings and production optimization initiatives. The Group and its partners in the PSCs continue to pursue these initiatives to maintain and extend the production of the blocks. In addition, exploration upside still exists in both the PSCs with a large inventory of prospects and leads having been identifi ed. Any exploration success could potentially be converted into a development project, adding further value to the PSCs.
32
Basin PSC
RH Petrogas 60% working interest with PetroChina as Operator
The Basin PSC is divided into the Walio and Ara areas, with each area holding a large inventory of prospects and leads. Based on PetroChina’s technical review, the unrisked recoverable prospective resources of oil and gas is estimated at 94 MMBOE net to the Group’s working interest. The recent North Klalin-1 gas and condensate discovery announced by the Group in October 2011 was drilled in the Arararea. Drill stem tests conducted on the well produced 5.9 million standard cubic feet of natural gas per day and 137 barrels of condensate per day. The North Klalin-1 well has been put on production in late March 2012. Two further appraisal wells, North Klalin-2 and North Klalin-3, are planned to be drilled in 2012 to appraise the size of the North Klalin fi eld. Should the wells be successful, a full fi eld development would be implemented. We expect to be able to develop a number of similar projects over the remaining term of the PSC which expires in 2020, especially with oil and gas prices staying high. The Group is also investigating the potential for large gas resources in the deeper pre-tertiary reservoirs within the block.
33
Island PSC
RH Petrogas 33.2142% working interest with PetroChina and Pertamina as Joint Operator
The offshore area of the Island PSC holds exploration and development potential for the Group. Currently, only the TBA oil fi eld has been developed and produced offshore. Other discoveries in the offshore area include the TBC fi eld (gas discovery), North Sele fi eld (gas discovery) and the Koi fi eld (oil & gas discovery). The Koi-1 discovery well drilled in 2000 fl owed 980 barrels of oil per day and 2.7 million standard cubic feet of gas per day on test.
A 400 sq km 3D seismic acquired over the offshore Koi Complex area in 2010 has identifi ed several potentially high impact prospects for drilling. The Group and its partners in the Island PSC are currently planning a multi-well drilling program to appraise the Koi discovery and to explore a much larger prospect structurally updip and adjacent to Koi. Drilling is targeted to commence in the fourth quarter of 2012. If the wells are successful, development planning will commence immediately. In addition, the Group and its partners in the Island PSC are also evaluating the potential of developing and monetizing the TBC and North Sele gas discoveries.
There also remain signifi cant short term appraisal and development opportunities on the onshore portion.
Fuyu-1 PSC in the PRC
RH Petrogas 100% working interest and Operator subject to CNPC back in of 51% during production phase
The Group’s fi rst oil and gas project in the PRC is a PSC with CNPC to jointly develop and produce hydrocarbon resources in Fuyu-1 Block in the Songliao Basin, Jilin Province, the PRC. The Group operates the Fuyu-1 PSC through its subsidiary, KRL.
Fuyu-1 PSC is located on the southern fringe of the prolifi c Songliao Basin in northeast China
where the giant Daqing oilfi eld is located. The Yongping oilfi eld within the PSC was zoned for development after the PRC government sanctioned the fi eld’s reserves in 2009. Yongping oilfi eld produces heavy crude oil from shallow reservoirs which requires thermal recovery. Since the award of the Fuyu-1 PSC in 2007, a total of 98 shallow wells have been drilled by KRL with interpreted pays in most of the wells.
A revised Overall Development Plan (“ODP”) proposing the phased development of the Yongping oilfi eld was submitted to CNPC in December 2011. CNPC’s approval for the ODP is expected to be received in the second to third quarter of 2012. A fi nal government approval by National Development and Reform Commission is expected in the fourth quarter of 2012. Commencement of development and commercial production will take place after the fi nal approval has been issued.
A deep well JF001 was drilled in July 2011 to test the deeper zones beneath the Fuyu block. The well reached total depth (TD) of 2,272 m and encountered 30 m of net gas pay in tight sand reservoir. A second well is planned to be drilled in 2012 and if successful, will be tested with hydraulic fracturing together with the JF001 well.
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West Belida PSC in Indonesia
RH Petrogas 94% working interest and Operator
The Group, via its subsidiary, Orchard Energy (West Belida) Limited operates the West Belida PSC. The West Belida Block is located in the prolifi c South Sumatra Basin covering an area of approximately 1,402 sq km and is close to a number of oil and gas discoveries. Awarded in 2009, the West Belida PSC is currently in the exploration phase. In 2011, the Group completed the acquisition and processing of 240 km of 2D seismic survey in the block. The survey succeeded in defi ning several oil prospects within the block. These included the Gitar prospect, a four way dip closure located immediately south of a producing fi eld in the neighboring block. Drilling of the Gitar-1 exploration well is planned in the third quarter of 2012. If successful, the Group plans to accelerate the appraisal program for early production.
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C. Competitive Strengths
The senior management and key employees of the Group have proven exploration and production track records in the Asia-Pacifi c region, especially South East Asia
Information on the business and working experience of some of the senior management and key employees of the Group are set out below:-
Dr Tan Jee-Theng Tony joined as the Group CEO and Executive Director in June 2010. Dr Tan has over 30 years of international oil and gas exploration and production, as well as merger and acquisition experience, particularly in the Asia-Pacifi c region. Before joining the Company, Dr Tan was the CEO and Director of Orchard Energy Pte. Ltd. which was previously a wholly-owned indirect subsidiary of Temasek Holdings (Private) Limited and Senior Vice President, Exploration and Production of Singapore Petroleum Company Ltd. His extensive geological knowledge, coupled with his management experience and excellent relationship with ASEAN National Oil Companies, provides Dr Tan the edge and com petitive position to lead the Group.
Chang Cheng-Hsing Francis joined the Group as Vice President for Exploration & Production in June 2010. His 34 years’ experience with US based major and independent oil companies spans many producing basins in fi ve continents. Before joining the Group, he held management and executive positions with GNT International Group, Texas American Resources, Kerr McGee/Anadarko Petroleum.
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These senior management and key employees each possess more than 30 years’ experience managing and operating oil and gas businesses in different parts of the world. The Company considers such knowledge and experience to be valuable and which provides the Group with the critical leadership and competency as the Group transforms into an oil and gas company. The strength of their leadership is evidenced by the successful execution of the sale and purchase agreements of Basin PSC and Island PSC in September 2010 within a tight timeframe since joining the Company in June 2010.
Controlling Shareholders have strong business connections and network
The Controlling Shareholders of the Company are linked to the Rimbunan Hijau Group, which is a large diversifi ed conglomerate in Malaysia, founded by Tan Sri Datuk Sir Tiong Hiew King with extensive business network in different parts of the world. Tan Sri Datuk Sir Tiong Hiew King introduces the Group to business opportunities in the Asia-Pacifi c region through his network of companies and contacts. The Directors believes that the Group is able to leverage on the strengths of Tan Sri Datuk Sir Tiong Hiew King and his network of companies and contacts to grow and strengthen its portfolio of assets.
The Controlling Shareholders of the Company have been supportive of the Group’s expansion plans and had in the past provided shareholder’s loan(s) to the Group, including to assist the Group in funding the acquisition of assets such as the Basin PSC and Island PSC.
Diversifi ed portfolio of exploration, development and production assets
The Group produced an average of around 4,600 barrels of oil equivalent per day from the Basin PSC and Island PSC in 2011 net to the Group’s working interests (95% of the production being oil). These producing assets which have a long history of production contribute positive operating cash fl ow to the Group and provide opportunities for further production growth.
Fuyu-1 PSC is currently at the pre-development stage. CNPC approval for the ODP is expected to be received in the second to third quarter of 2012. Final approval from the National Development and Reform Commission is expected in the fourth quarter of 2012. Commencement of development and commercial production will take place after fi nal approval is obtained.
West Belida PSC is currently in the exploration stage with drilling of the Gitar-1 exploration well planned in the third quarter of 2012. If successful, the Group plans to accelerate the appraisal program in West Belida for early production
As at 1 January 2012, the Group’s net proved plus probable (2P) and proved plus probable plus possible (3P) reserves were 12.5 MMBOE and 14.5 MMBOE respectively and contingent resources of 148.4 MMBOE based on an independent third parties assessment.
The Group’s producing assets provides operating cashfl ow whereas its PSCs in the development and exploration phase provides upside potential from future production streams and discoveries.
D. Business Strategies
Focus on increasing reserves through development activities
The Group will focus on adding incremental reserves in the producing Basin and Island PSCs through an active infi ll drilling program. For 2012, the Group targets to drill 3 development wells in Basin PSC.
The Group has submitted a revised ODP proposing the phased development of the Yongping oilfi eld in the Fuyu-1 PSC and a fi nal government approval is expected in the fourth quarter of 2012. The Group targets to carry out 16 well pilot test and drill 1 exploration well in Fuyu-1 PSC by end of 2012.
The Group is of the view that the development activities in the Basin PSC, Island PSC and Fuyu-1 PSC will provide nearer term opportunities for increasing production compared to exploration activities. Therefore, development activities will be prioritized in terms of utilization of proceeds from the proposed fund-raising as 60-80% of the Proposed Placement will be used for development activities.
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Focus on increasing resources through exploration activities
The Group intends to carry out further exploration activities within the existing portfolio of assets to add to its reserve and resource base. Any exploration success could potentially be converted into a development project and add further value to the PSCs.
For 2012, the exploration activities in the Basin PSC are focused on appraising the North Klalin discovery and drilling several onshore prospects. Barring unforeseen circumstances, the Group intends to drill 3 exploration and 2 appraisal wells by end of 2012.
For 2012, the exploration activities in the Island PSC will be focused in the offshore Koi Complex area. Barring unforeseen circumstances, the Group intends to drill at least 1 exploration well by the end of 2012.
In respect of the West Belida PSC, barring unforeseen circumstances, the Group intends to drill 1 exploration well by end of 2012.
Acquisition of new oil and gas assets
In addition to growing organically, the Group is also pursuing growth through acquisitions, partnership, joint ventures or strategic alliances with parties who can create synergistic value vis-a-vis the Group’s existing business.
The Group is actively seeking new acquisitions of oil and gas assets which offer good investment returns medium to long production lifespan, low to medium sub-surface risk and which come with exploration upside. The Group will target assets in the Asian region, with a stronger focus on Indonesia, Malaysia, Myanmar, Papua New Guinea, Thailand and Vietnam.
The Group will also continue to evaluate opportunities and participate in Greenfi eld or exploration activities on a selective basis. The Group will only focus on strategic exploration assets with suffi cient materiality and a good chance of success.
Increasing its capability and expertise as an operator
Currently, the Group is the operator for the Fuyu-1 PSC in the PRC and West Belida PSC in Indonesia. The Group will continue to focus on improving effi ciency and capability as it carries out its operations in these areas. By enhancing capability and expertise as an operator, the Group will be well-positioned to increase its reserves and production through the successful implementation of exploration or development programs in its existing or new assets.
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APPENDIX B
TRADING VOLUME OF THE SHARES
The price range and volume of the Shares traded on the SGX-ST over the last 12 months immediately preceding the Latest Practicable Date and for the period from 1 July 2012 to the Latest Practicable Date are as follows:-
Month
Price Range Volume of Shares Traded
High1
( S$) Low1
( S$ ) Number of Shares
(’000)
July 2011 0.800 0.710 573
August 2011 0.720 0.590 319
September 2011 0.600 0.530 264
October 2011 0.550 0.500 209
November 2011 0.530 0.470 267
December 2011 0.490 0.390 291
January 2012 0.500 0.420 193
February 2012 0.530 0.450 867
March 2012 0.510 0.460 885
April 2012 0.525 0.485 446
May 2012 0.520 0.450 241
June 2012 0.485 0.410 226
1 July 2012 – Latest Practicable Date 0.465 0.465 32
Note:
(1) The high and low prices are based on daily closing price of the Shares.
Source: Bloomberg L.P. This information has been provided for information purposes only and has been extracted from information published by Bloomberg L.P. that is publicly available. Bloomberg L.P. has not specifi cally consented to the inclusion of the information above, and is thereby not liable for these statements. The Company has included the above information it its proper form and context and has not verifi ed the accuracy of the content of these statements. The Company is not aware of any disclaimers made by Bloomberg L.P. in relation to these quotes.
39
RH PETROGAS LIMITED(Company Registration No.: 198701138Z)
(Incorporated in the Republic of Singapore)
N OTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting (“EGM”) of RH PETROGAS LIMITED (the “Company”) will be held at 20 Harbour Drive, PSA Vista #06-03, Singapore 117612 on Tuesday, 7 August 2012 at 9.30 a.m. for the purpose of considering and, if thought fi t, passing with or without modifi cations, the following ordinary resolutions:-
Capitalised terms used but not otherwise defi ned herein shall bear the same meanings ascribed to them in the Circular dated 20 July 2012.
ORDINARY RESOLUTION 1: PROPOSED DEBT CONVERSION
That:-
(A) approval be and is hereby given for the Proposed Debt Conversion and for the Company to issue and allot an aggregate of 157,455,957 Debt Conversion Shares at the Conversion Price for each Debt Conversion Share to RH Capital Limited, Sharptone Investments Limited and Surreyville Pte Ltd to be credited as fully paid on issue in full settlement of the Outstanding Debts, pursuant to and subject to the terms and conditions of the Debt Conversion Deed; and
(B) the Directors of the Company and each of them be and are hereby authorised to complete and to do all such acts and things (including executing all such documents as may be required) as they or he may consider necessary, desirable or expedient to give effect to this Resolution.
ORDINARY RESOLUTION 2: THE PROPOSED PLACEMENT
That:-
(A) approval and authority be and is hereby given to the Directors of the Company to:-
(i) allot and issue up to 262,292,000 Placement Shares at an Issue Price to be determined by the Board at its discretion which shall not be less than S$0.360 for each Placement Share and up to 87,431,000 Placement Warrants in registered form to be issued together with the Placement Shares at an Exercise Price to be determined by the Board at its discretion which shall be at a premium of up to 20% to the Issue Price for each Placement Warrant pursuant to such structure, at such ratio of Placement Warrants in relation to the Placement Shares and in such manner, on such terms and at such time(s) as determined jointly by the Board and the Sole Global Coordinator following a bookbuilding process at the relevant time(s); and
(ii) create and issue such further or additional Placement Warrants as may be required or permitted to be issued in accordance with the terms and conditions of the Deed Poll (such as an event requiring an adjustment of the number of Placement Warrants) (any such further Placement Warrants to rank pari passu with the Placement Warrants and for all purposes to form part of the same series, save as may otherwise be provided in the terms and conditions of the Deed Poll);
40
(B) approval and authority be and is hereby given to the Directors of the Company to allot and issue, notwithstanding that the issue thereof may take place after the next or any ensuing annual or other general meeting of the Company:-
(i) such number of Warrant Shares on the exercise of the Placement Warrants, credited as fully paid, subject to and otherwise in accordance with the terms and conditions of the Deed Poll, such Warrant Shares (when issued and paid) to rank pari passu in all respects with the then existing Shares of the Company (save as may otherwise be provided in the terms and conditions of the Deed Poll) save for any dividends, rights, allotments or other distributions the record date for which falls before the date of issue of the Warrant Shares; and
(ii) such further or additional Warrant Shares as may be required to be allotted and issued on the exercise of any further or additional Placement Warrants referred to in paragraph (A)(ii) above; and
(C) the Directors of the Company and each of them be and are hereby authorised to complete and to do all such acts and things (including executing all such documents as may be required) as they or he may consider necessary, desirable or expedient to give effect to this Resolution.
By Order of the BoardRH Petrogas Limited
Wee Woon Hong Company Secretary
20 July 2012
Notes:–
(1) A shareholder of the Company entitled to attend and vote at the EGM of the Company may appoint not more than two proxies to attend and vote in his/her stead. A shareholder of the Company which is a corporation, is entitled to appoint its authorised representative or proxy to vote on its behalf. A proxy need not be a shareholder of the Company.
(2) If a proxy is to be appointed, the instrument appointing a proxy must be duly deposited at the registered offi ce of the Company at 20 Harbour Drive, PSA Vista #06-03, Singapore 117612 not later than 48 hours before the time appointed for the holding of the EGM.
(3) The instrument appointing a proxy must be signed by the appointor or his attorney duly authorised in writing. Where the instrument appointing a proxy is executed by a corporation, it must be executed either under its common seal or under the hand of any offi cer or attorney duly authorised.
(4) A Depositor’s name must appear on the Depository Register maintained by The Central Depository (Pte) Limited as at 48 hours before the time fi xed for holding the EGM in order for the Depositor to be entitled to attend and vote at the EGM.
R H PETROGAS LIMITED(Incorporated in the Republic of Singapore)(Company Registration Number: 198701138Z)
P ROXY FORMEXTRAORDINARY GENERAL MEETING
I/We* (Name) NRIC/Passport no.* of
(Address)
being shareholder/shareholders* of RH Petrogas Limited (the “Company”) hereby appoint:
Name NRIC/Passport Number Proportion of Shareholdings
Number of Shares %
Address
and/or*
Name NRIC/Passport Number Proportion of Shareholdings
Number of Shares %
Address
or failing him/her, the Chairman of the Extraordinary General Meeting of the Company (the “EGM”) as my/our* proxy/proxies* to attend and to vote for me/us* on my/our* behalf and, if necessary, to demand a poll at the E G M to be held at 20 Harbour Drive, PSA Vista #06-03, Singapore 117612 on Tuesday, 7 August 2012 at 9.30 a.m., and at any adjournment thereof.
(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolution as set out in the Notice of EGM. In the absence of specifi c directions, the proxy/proxies will vote or abstain as he/they may think fi t, as he/they will on any other matter arising at the E G M .)
No. ORDINARY RESOLUTIONS
To be used on a show of hands
To be used in the Event of a Poll
For** Against**No. of Votes
For***No. of Votes Against***
1. The Proposed Debt Conversion
2. The Proposed Placement
* Delete accordingly** Please indicate your vote “For” or “Against” with an “X” within the box provided.*** If you wish to exercise all your votes “For” or “Against”, please indicate with an “X” within the box provided. Alternatively,
please indicate the number of votes as appropriate.
Dated this day of 2012
Signature(s) of Shareholder(s) or Common Seal
IMPORTANT: PLEASE READ NOTES OVERLEAF
Important:1. For investors who have used their CPF monies to
buy shares in the capital of RH Petrogas Limited, this Circular is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
Total Number of Shares Held
Notes:
1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defi ned in Section 130A of the Companies Act, Cap. 50), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members of the Company, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and registered in your name in the Register of Members of the Company, you should insert the aggregate number of Shares. If no number is inserted, this form of proxy will be deemed to relate to all the Shares held by you.
2. A shareholder entitled to attend and vote at the EGM is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a shareholder of the Company.
3. The instrument appointing a proxy or proxies, duly executed, must be deposited at the registered offi ce of the Company at 20 Harbour Drive, PSA Vista #06-03, Singapore 117612 not less than 48 hours before the time appointed for the EGM.
4. Where a shareholder appoints more than one proxy, he shall specify the proportion of his shareholding to be represented by each proxy and, if no percentage is specifi ed, the fi rst named proxy shall be deemed to represent 100 per cent. of the shareholding and the second named proxy shall be deemed to be an alternate to the fi rst named.
5. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal or under the hand of its attorney or a duly authorised offi cer.
6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certifi ed copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
7. A corporation which is a shareholder may authorise by resolution of its directors or other governing body such person as it thinks fi t to act as its representative at the EGM, in accordance with Section 179 of the Companies Act, Chapter 50.
8. The submission of an instrument or form appointing a proxy by a shareholder does not preclude him from attending and voting in person at the EGM if he so wishes.
9. The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed on the instrument of proxy. In addition, in the case of Shares entered in the Depository Register, the Company may reject an instrument of proxy if the shareholder, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.
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Tel: (65) 63278398