Asia Cement (China) (00743) and the Offeror, Asia Cement Corporation, jointly announce that on 5 June 2024, the Offeror, in connection with the proposal to privatize the Company by way of a scheme of arrangement under Section 86 of the Companies Act, requested the Board to put forward the proposal to the Scheme Shareholders, which involves the cancellation of the Scheme Shares. In consideration of the cancellation of such Shares, the Offer Price will be paid in cash to the Scheme Shareholders for each Scheme Share and the listing of the Shares on the Hong Kong Stock Exchange will be cancelled.
Subject to the Scheme becoming effective, all Scheme Shares will be cancelled in exchange for HK $3.22 in cash for each Scheme Share. The offer price of HK $3.22 represents a discount of approximately 3.01% to the closing price of HK $3.32 per Share on 28 May 2024.
Assuming no new Shares will be issued or cancelled on or before the Record Date, the total amount payable for the full implementation of the Proposal will be approximately HK $1,359 million based on the shareholding position as at 31 December 2023. Upon
the Scheme becoming effective, the Offeror will directly hold 100% of the shares of the Company and the listing of the Shares on the Hong Kong Stock Exchange will be revoked. In addition, the Company has applied to the Hong Kong Stock Exchange for the resumption of trading in the Shares on the Hong Kong Stock Exchange with effect from 9:00 a.m. on 6 June 2024.
It is reported that Asia Cement was founded in 1957, mainly engaged in the manufacture, wholesale and trade of cement and ready-mixed concrete, headquartered in Taiwan Province, directly or indirectly holding 73.07% of Asia Cement (China).
In addition, according to the "2023 Top 100 List of China's Cement Clinker Production Capacity" released by China Cement Network, Asia Cement has 26.629 million tons of cement clinker production capacity, ranking tenth in the country.
What is "privatization"? The "privatization" of
listed companies is a special kind of merger and acquisition operation in the capital market; the biggest difference from other merger and acquisition operations is that its goal is to delist the acquired listed companies and turn them from public companies into private companies. Generally speaking, the controlling shareholders buy back all the shares in the hands of minority shareholders, expand the existing share, and eventually delist the company. Why did
Asia Cement choose to "privatize" at this time? The benefit of privatization of
1、 is that it can improve the efficiency of company decision-making, and important new projects do not need to be studied in detail, nor need to be reported to the board of directors, so they can be acted on more quickly. From this point of view, Asian Cement will have further decision-making actions in the strategic development of enterprises. The premise of privatization of
2、 is often that the controlling shareholders think that the current stock market is good and the price is obviously undervalued, so the stock price is very cheap at this time, and it is profitable to buy back a large number of shares. At present, the cement industry is in a downward trend, and cement stocks are generally at a low level, which provides a window for the privatization of Asian cement. After the privatization of
3、, the controlling shareholders have greatly reduced the loss of allowing other shareholders to share the benefits of the company, enhanced their control over the company, and are less restricted by investment institutions and regulatory bodies, and no longer have the mandatory information disclosure requirements when listing, which also saves a lot of information maintenance costs. It is of positive significance for Asian Cement to improve its operational efficiency and cope with market changes in the later period.
