On July 29, Great Eastern Holdings (GEH) will be sending out election forms to shareholders. “For shareholders who wish to receive the bonus ordinary shares, no action is needed. You do not need to fill out the form. Nothing needs to be done. But for shareholders who wish to receive Class C shares, they would need to fill out the form and submit it to the CDP by Aug 7, 5.30pm,” says Ronnie Tan, group CFO, GEH.
On July 8, three resolutions were presented to GEH’s shareholders. Resolution A was on the delisting where only minority shareholders could vote. This was not passed.
Resolution B was a vote on the adoption of a new constitution which included the existing Constitution of the Company to provide for the issuance of a new class of non-listed, non-voting convertible preference shares known as Class C shares.
Resolution C was a vote on the issuance of a bonus issue and to seek permission to convert Class C shares into ordinary shares after a period of time (five years).
The board has recommended that GEH’s shareholders opt not to receive the Class C shares. The Class C shares were structured to allow OCBC to support the resumption of trading by GEH in the event that the delisting resolution was not approved.
“We are optimistic that Great Eastern will resume trading through this process. It doesn't make sense for shareholders, other than OCBC, to take on the Class C shares, because they have disadvantages,” Tan says.
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First, Class C shares will not be traded on the SGX, and will not be held in CDP.
Secondly, they cannot be exchanged for ordinary shares for five years.
Third, Class C shares do not hold any voting rights. Minority shareholders who voted for delisting will be diluted if they opt for Class C shares.
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“Shareholders will be giving up quite a lot if they want to choose [Class C] shares. This is like the final 100 metres of a marathon. We look forward to finishing the race and allowing GEH to resume trading,” Tan says.
If more than 1/3 of the shares held by minorities elect Class C shares, GEH will not be able to meet the free float requirement.
According to GEH’s announcement on July 8, 23.66 million shares voted in Resolution A; 15 million shares voted for delisting, and 8.6 million shares voted against delisting.
