By Chan Quan Min
IOI Corporation’s minority shareholders see red on the haphazard stock exchange listing of the conglomerate’s property arm, IOI Properties Group.
Minority shareholders, led by Minority Shareholder Watchdog Group (MSWG) CEO Rita Benoy Bushon are unhappy with the timing of IOI Properties’ initial public offering (IPO).
“Minority shareholders of IOI Corp have every right to feel disgruntled by the short space of time given to subscribe for their entitlement for shares,” Rita said in this week’s edition of the MSWG newsletter.
According to Bushon, the company only allowed for an application period of a mere five full working days.
The listing announcement was made on Dec 26 last year, consisting of a distribution-in-specie of two-thirds of shares in IOI Properties alongside a restricted offer for sale of the remaining one-third of shares in IOI Properties.
According to the prospectus, shares in IOI Properties are restricted for distribution to IOI Corp shareholders only.
“IOI should have realised that by conducting this exercise over the vacation period, many people may be on leave and postal deliveries could also be delayed in this period, which also meant that many may not have received the necessary documents by post on time,” Bushon wrote.
“The company should really have given minorities more time to subscribe for their entitlements.
“We view this as especially serious since (IOI Corp) has been the subject of criticism following its delisting in 2009, being bought out at just 0.66 times NTA (net tangible assets) for a RM1.3 billion valuation,” Bushon added.
Although the company has since extended the deadline for application for the restricted offer for sale by four days, Bushon felt IOI Corp should further extend the closing period for applications to show their good faith to minority shareholders:
“Otherwise, it could be construed negatively by the public that the offer not taken by entitled shareholders (for reasons beyond them) would be given to other shareholders at the discretion of the board, at a discount.”
She said minority shareholders are likely to be keen to take advantage of the offer: “the reason being, each IOI Properties share at RM1.76 under the restricted offer for sale comes at a 30% discount to the reference price of RM2.51.”
In addition, there is an even steeper 42.7% discount to IOI Properties’ pro-forma net asset per share of RM3.07, Bushon claimed.
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