Cdl Undertake Market Purchase Preference Shares Makes Offer 78 Cents Apiece
CDL to Retire 10% of Preference Shares through Off-Market Offer
Singapore-listed real estate developer City Developments Limited (CDL) has announced plans to buy back 10% of its preference shares through an off-market equal access offer. The company is offering a price of 78 cents per share to its preference shareholders, which amounts to about 26.8 million shares. The offer comes after CDL’s shareholders approved a general mandate for the board to purchase non-redeemable convertible noncumulative preference shares at the annual general meeting (AGM) held on April 23.
According to the offer, each preference shareholder can sell up to 10% of their shares, with the deadline for acceptances set for June 2. Shareholders are also allowed to put up more than 10% of their shares for tender if other shareholders accept less than their full entitlement. However, the total limit of 26.8 million shares remains unchanged.
CDL has 268.01 million preference shares issued as of April 23. The offer will be open for acceptance for 10 calendar days, excluding public holidays, starting from May 23. The company will issue an offer letter to its preference shareholders on this date, and the deadline for accepting the offer is June 2.
The company states that the off-market offer will allow it to have better control over its share capital in relation to its preference shares. It also clarifies that it has no intention to convert the preference shares into ordinary shares. The trading volume for CDL’s preference shares has remained low, with an average daily trading volume of 3,333 shares over the past month, and 11,237, 8,796, and 8,571 shares traded over the past three, six, and twelve months, respectively. All of these numbers represent less than 0.0042% of the total number of issued preference shares.
Payment for the preference shares will be made on June 10. CDL’s CEO Sherman Kwek stated at the company’s AGM on April 23 that it was a good time to discuss buybacks, given the company’s share price levels at the time. As of December 31, 2023, CDL’s net asset value (NAV) was $10.17 per share, while its revalued NAV (RNAV) was $17.57 per share, or $19.68 per share when considering the fair value of all valuation surpluses on its portfolio.
CDL’s share price on April 23, 2024, was $4.90, down 17.23% from the previous year and 4.3% year-to-date. The company launched a share buyback program in March 2024, citing a significantly undervalued share price despite having strong fundamentals. The company spent nearly $13 million on share buybacks over three days before stopping the program three months later. Its last share buyback was in June 2024.
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This story was originally published on The Business Times.