Stratech to delist from SGX, provide exit offer to shareholders
SINGAPORE (THE BUSINESS TIMES) – The Singapore Exchange (SGX) has given notice that it will proceed to delist The Stratech Group, which is in liquidation, as the latter has not submitted a proposal to resume the trading of its shares after more than three years.
Under listing rules, the company or its controlling shareholders must thus provide a reasonable exit offer to shareholders, Stratech’s court-appointed liquidators from BDO Advisory said in a filing late Thursday night (Sept 10).
The surveillance technology provider’s controlling shareholders were the husband-and-wife team of executive chairman David Chew and executive director and chief corporate officer Leong Sook Ching.
According to the filing on Thursday, the company has to inform SGX of its exit offer proposal as soon as practicable – within one month from the date of the bourse operator’s letter to Stratech – and provide updates on SGXNet on the status of the proposal.
Trading in the mainboard-listed stock will remain suspended until the completion of the exit offer.
In SGX’s notification of delisting, the bourse operator noted it had “provided ample opportunities for the liquidators to submit a resumption proposal based on representations that have been made by the liquidators in each instance”.
BDO on Thursday said that despite its best endeavours, Stratech had not been able to submit any definitive resumption proposal.
The trading suspension began in August 2017, after an earlier trading halt could not be lifted because the Stratech group of companies was in a negative equity position and seeking to undertake a rights issue to pay off operational costs.
Subsequently, the Singapore High Court in September 2018 ordered Stratech and its subsidiary, Stratech Systems, to be wound up.
In May this year, SGX probed BDO about the status of the liquidation, seeing as the latest transaction related to the liquidation – a sale of Stratech’s patent – had taken place last November.
BDO then sought the exchange’s preliminary in-principle non-objection to transfer Stratech’s listing status to a company incorporated in the British Virgin Islands, after the liquidators received an expression of interest from the latter. However, there were no further developments to this end.
In July, the liquidators again wrote to SGX, this time about a proposal for a Singapore-incorporated firm in the entertainment industry to acquire Stratech’s listing status.
The exchange thus asked that details of the resumption proposal be submitted by July 31, and the liquidators requested more time to evaluate the draft non-binding term sheet with the Singapore-incorporated firm. On Aug 24, they said they were still unable to gather the required information to submit a proposal.
BDO on Thursday noted that it was reviewing SGX’s delisting notice, and would make further announcements as and when there are material developments.
The court’s winding-up order in 2018 came after Stratech failed to garner enough support from creditors on its proposed schemes of arrangement.
The company previously inked a US$20 million (S$27.3 million) share placement with Boulevard Capital Partners, and planned to convert debt owed to Mr Chew and Ms Leong into equity. The couple also signed a binding term sheet then to refinance their personal property to inject additional funds into the company.
In 2019, a two-storey bungalow in the Belmont Park good class bungalow area registered to Mr Chew and Ms Leong was put up for auction thrice. An option was granted later in the year for a sale price of between $34 million and $35 million, The Business Times reported.
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