Kuok Group makes offer for POSH at S$0.215 per share in cash

QUETZAL Capital has announced a voluntary conditional cash offer for Pacc Offshore Services Holdings (POSH) at S$0.215 per share in cash.

Quetzal Capital is the bid vehicle formed by certain members of the Kuok group of companies, namely Kuok (Singapore), Trendfield Inc, a wholly-owned subsidiary of Kuok Brothers Sdn Bhd, and Merry Voyage Limited, a wholly-owned unit of Kerry Holdings.

The Kuok Group is a conglomerate with diversified investments in commodities, hospitality, logistics, real estate and shipping businesses, among others.

The offer price is final, and the offeror does not intend to revise the offer price, it said. The offeror has also secured irrevocable undertakings representing 75.03 per cent of the total number of shares outstanding from KSL and its wholly-owned subsidiary Camsward Pte Ltd.

The offer is conditional on receiving valid acceptances of at least 90 per cent of outstanding shares at the close of the offer.

The offer price represents a premium of about 97.2 per cent over the last traded price on Oct 30. It also represents a premium of about 35.3 per cent over the 12-month volume-weighted average price.

The offeror said the offer allows shareholders to realise their entire investment in POSH at an "attractive premium" which may otherwise be difficult to achieve due to the low trading liquidity of the shares, amid continuing challenges in the global offshore oil and gas sector.

The offeror added that it believes privatising POSH will provide it with more flexibility to manage POSH's operational and funding requirements, and will also optimise the use of POSH's resources.

Separately, the offshore marine services provider posted wider losses of US$40.4 million in its third quarter, compared to net losses of US$5.3 million in the year-ago period.

Revenue fell 8 per cent to US$73.3 million, dragged down by lower contributions from offshore accommodation.

"In Q3 FY19, POSH Xanadu continued to be on charter to Petrobras and POSH Arcadia was off-hired in July 2019 after her short-term charter in South-east Asia. This is compared with Q3 FY18, when both of the group's semi-submersible accommodation vessels were fully deployed," it explained.

To make things worse, the group also recorded an impairment amount of US$25.4 million for its investment in POSH Terasea, a 50-per cent owned joint venture (JV) by the group. The group also impaired a loan amount of US$14.4 million due from POSH Terasea. These impairments were made in relation to the liquidation of the JV.