Chemrez mulls voluntary delisting

MANILA, Philippines - Chemrez Technologies Inc. is willing to voluntarily delist from the Philippine Stock Exchange (PSE) this year if it is no longer able to comply with the minimum public float upon the completion of the tender offer by its parent company, D&L Industries Inc.

In a statement, Chemrez said it intends to voluntarily remove itself from the country’s only stock market should its public float fall below the minimum 10 percent requirement after the tender offer.

To date, Chemrez said its principal stockholders, executive officers, and affiliates, have advised that they have already tendered all of their currently owned shares in the offer.

“If, as result of the tender offer, the ownership falls below the minimum public ownership requirement of 10 percent as mandated by the PSE, Chemrez Technologies will most likely initiate voluntary delisting rather than wait for the Philippine Stock Exchange to institute involuntary delisting,” the firm said, adding that it has no intention to turn the company into a “listed shell entity.”

Chemrez treasurer and chief finance officer (CFO) Alvin D. Lao said the tender offer would serve as a final attractive opportunity for the remaining minority shareholders to fully realize their profits.

D&L Industries, which currently owns about 35 percent of Chemrez, announced early this month that it plans to buy out other shareholders of Chemrez at a cost of P5.10 billion.

D&L Industries intends to purchase up to 850.39 million shares of Chemrez, equivalent to 65.3 percent of the latter’s issued and outstanding capital.

The tender offer price is P6.00 per share, which is 24 percent above the 60-day moving average of the Chemrez share price as of August 29.

The tender offer commenced last September 4 and would run until October 3.

Chemrez said tendered shares would be crossed at the local bourse on October 7, with settlement starting October 10.

“Should the company elect to delist and have its shares no longer traded on the PSE, the ability to quickly liquidate the shares may be diminished in the absence of a healthy marketplace. Delisting would certainly reduce the shares’ marketability,” Lao said.

“Also, trading of shares of a private company entails higher taxes as capital gains tax and documentary stamp tax on every sale, barter, exchange or other disposition of shares of Chemrez shall be imposed,” he added.

Chemrez is a leading manufacturer of resins, oleochemicals, and specialty products in the Philippines.

As of the first six months of the year, the firm’s revenues grew 29 percent year-on-year at P2.72 billion, while its net income climbed by 45 percent to P207 million.