Hong Leong unit eyes Thakral takeover

Aug 16, 2006
The Straits Times

Hong Leong Asia's unit, Venture Delta, has offered eight cents a share for all the remaining stock it does not own in Thakral Corp.

Venture yesterday made the takeover move after it crossed the 30 per cent trigger threshold for a mandatory offer.

It has increased its stake in Thakral, a mainboard-listed distributor of consumer electronic products, to 36.7 per cent after it converted bonds into new Thakral shares.

Hong Leong told the Singapore Exchange yesterday that Venture had exercised its right to convert all of its 52.9 million outstanding unsecured convertible bonds issued by Thakral into new shares.

Each bond, which is due in 2009 in the denomination of 80 cents, can be converted into 10 new shares at eight cents each.

This meant the 52.9 million bonds yielded 529.3 million new Thakral shares for Venture.

The net asset value of the new shares is about $37.7 million, based on the unaudited financial statements of Thakral for the three months ended June 30.

Venture had held 19.25 per cent of Thakral but these new shares pushed its stake to 36.7 per cent of Thakral's enlarged share capital.

This triggered a mandatory takeover as Venture's stake had crossed the 30 per cent threshold.

It will make a conditional cash offer to buy all the shares and convertible bonds that it does not own in Thakral for eight cents each.

Venture, which intends to maintain Thakral's listing status, is an indirect subsidiary of Hong Leong's New York-listed unit, China Yuchai International.

Hong Leong in turn owns 20 per cent of China Yuchai, an investment holding company, whose principal activities include making diesel engines in China.

Thakral is a distributor of consumer electronic products, with operations mainly in mainland China and Hong Kong. It also handles contract manufacturing and property development.

Thakral's share price remained unchanged yesterday at 8.5 cents.

DBS Bank has been appointed financial adviser to Venture for the offer.