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Singapore Company News: More Stock Corporations Seeking Privatization
Singapore Company News: More Stock Corporations Seeking Privatization
Fifteen publicly-listed companies in Singapore have filed for their privatization this year due to low valuations, poor market following, and failure to raise funds.
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(pr4links.com)
10/09/2010
"Despite the increasing number of companies seeking privatization this year, PrimePartners corporate finance director Mark Liew said that there are “still more companies wanting to go public than those wanting to delist themselves from the stock marke"
Fifteen publicly-listed companies in Singapore have filed for their privatization this year due to low valuations, poor market following, and failure to raise funds. Most of the companies which sought for privatization are S-chips, or Chinese corporations listed on Singapore Exchange and those which have already been suspended from trading.
In an interview, Stamford Law director Soh Chun Bin said that “a significant number of shareholders feel that their companies are undervalued by the market” which prompted them to privatize their businesses.
Soh added that privatization offers several advantages including lower compliance costs, greater operational flexibility, and greater control in restructuring the overall business operation. During the previous years, small companies, which traditionally suffer from “poor market following,” accounted for the majority of companies that shifted to privatization. But this year, several major companies have also filed for this arrangement in an effort to overhaul their business operations.
Despite the increasing number of companies seeking privatization this year, PrimePartners corporate finance director Mark Liew said that there are “still more companies wanting to go public than those wanting to delist themselves from the stock market.”
Just recently, Hong Kong Land has announced its plan to privatize its MCL Land, which is a property developer, due to the latter’s small free float or shares available for trading, high compliance costs required among publicly-listed companies, and low trading liquidity.
The company added that MCL has failed to raise “a viable amount of funds for the past 10 years in Singapore Exchange” and added that it is unlikely to do so for the next several years.
Hong Kong Land is the major shareholder of MCL, owning about 77 percent of its shares.
While most of the companies cited “poor market following,” most analysts believe that some major shareholders have sought privatization in order to restructure their companies and even list again their corporations to stock market.
These are some the companies that have recently sought privatization: China Lifestyle, Hyflux Water Trust, Full Apex (with shareholders voted against the plan), Keda Communications, China Video Surveillance, and Zhongguo Pengjie.
This year, there are 24 companies which have already been delisted, including those which were forced to do so due to bankruptcy. In response with the growing number of companies planning to delist from the stock market, business registration company Asiabiz Services said it is confident that the stock investment remains “viable in the country due to its double-digit economic growth in the first semester.”
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