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http://www.businesstimes.com.sg/sub/news/story/0,4574,384343,00.html?
Published May 5, 2010
New Century IPO sinks in wake of complaint
Sudden about-turn after SGX receives complaint about lawsuit, material irregularities
By MICHELLE QUAH
(SINGAPORE) Singapore's largest local share offering this year - that of Chinese shipbuilder New Century Shipbuilding - has run aground.
The company announced last night that 'it has decided not to go ahead with its planned initial public offering (IPO) on the SGX-ST (Singapore Exchange) at this time'.
The sudden and unexpected withdrawal of the S$666.4 million IPO came on the eve of the offering's closing - and just days before the company's shares were due to begin trading next Tuesday.
An about-turn of this nature is said to be unprecedented in the local trading context.
New Century said yesterday that it would 'review the situation' and consider listing here 'at an appropriate time in the near future'.
The company gave no reasons for the withdrawal.
But sources have told The Business Times that the listing could not go ahead because SGX had received a complaint about New Century's prospectus containing material inaccuracies.
BT understands that the company's subsidiary is battling a lawsuit over the building of two bulk carriers (ships) for Sino Noble Pte Ltd, in a deal worth US$180 million.
One of New Century's two shipyards in China - New Times Shipyard - is understood to have been contracted to build the two ships.
The shipbuilding contracts are said to have been cancelled late last year and the client, Sino Noble, is now claiming back what it has paid for these ships, thus far - some US$60 million.
Sources told BT that a complaint was lodged with SGX this week over the fact that this lawsuit was not disclosed in New Century's prospectus - as well as the fact that the orders for the two ships are still reflected in the company's order book in its prospectus.
Indeed, the company's prospectus states, on page 206, that 'we (New Century) are not engaged in any legal or arbitration proceedings (either as plaintiff or defendant), including those that are pending or known to be contemplated, which may have or have had a material effect on our financial position or profitability in the past 12 months immediately preceding the date of the lodgment of this offering document with the Authority (Monetary Authority of Singapore)'.
The prospectus also states: 'As at March 31, 2010, the aggregate contract value of our order book amounted to approximately US$5.2 billion which included orders for 83 vessels with a combined tonnage of approximately 10.8 million DWT. The vessels are expected to be delivered between 2010 and 2012.'
Of these 83 vessels are two bulk carriers contracted by Sino Noble Pte Ltd, with a contractual delivery date of 2010, to be built by New Times Shipyard.
Information about the lawsuit and the termination of the shipbuilding contracts was not included in New Century's prospectus, despite the fact that the contracts had been cancelled last November and the arbitration proceedings were commenced against New Times on March 18 - both events taking place before March 31, 2010, which is the latest practicable date prior to the lodgement of the company's prospectus with MAS.
New Century said yesterday that, with the withdrawal of its IPO, all applications are deemed withdrawn and cancelled, and application monies will be refunded to applicants within three market days.
It also thanked the investing community, SGX and the Monetary Authority of Singapore (MAS) 'for their support, as well as their many advisers for their hard work in progressing its IPO application'.
UBS Investment Bank and Morgan Stanley are the joint bookrunners for the IPO. DBS is the sub-placement agent and coordinator of the IPO, while CIMB-GK Securities is the other sub-placement agent.
New Century, based in Jingjiang, China, is ranked fifth domestically in terms of its order book, measured by total deadweight tonnage (the weight a ship can safely carry). It is ranked 13th among shipbuilders worldwide.
Last year, New Century's profit stood at US$343.9 million, while its revenue hit US$1.63 billion.
The company's IPO was Singapore's largest since CapitaMalls Asia's IPO late last year. New Century had offered 560 million shares at a maximum price of S$1.19 each.
Published May 5, 2010
New Century IPO sinks in wake of complaint
Sudden about-turn after SGX receives complaint about lawsuit, material irregularities
By MICHELLE QUAH
(SINGAPORE) Singapore's largest local share offering this year - that of Chinese shipbuilder New Century Shipbuilding - has run aground.
The company announced last night that 'it has decided not to go ahead with its planned initial public offering (IPO) on the SGX-ST (Singapore Exchange) at this time'.
The sudden and unexpected withdrawal of the S$666.4 million IPO came on the eve of the offering's closing - and just days before the company's shares were due to begin trading next Tuesday.
An about-turn of this nature is said to be unprecedented in the local trading context.
New Century said yesterday that it would 'review the situation' and consider listing here 'at an appropriate time in the near future'.
The company gave no reasons for the withdrawal.
But sources have told The Business Times that the listing could not go ahead because SGX had received a complaint about New Century's prospectus containing material inaccuracies.
BT understands that the company's subsidiary is battling a lawsuit over the building of two bulk carriers (ships) for Sino Noble Pte Ltd, in a deal worth US$180 million.
One of New Century's two shipyards in China - New Times Shipyard - is understood to have been contracted to build the two ships.
The shipbuilding contracts are said to have been cancelled late last year and the client, Sino Noble, is now claiming back what it has paid for these ships, thus far - some US$60 million.
Sources told BT that a complaint was lodged with SGX this week over the fact that this lawsuit was not disclosed in New Century's prospectus - as well as the fact that the orders for the two ships are still reflected in the company's order book in its prospectus.
Indeed, the company's prospectus states, on page 206, that 'we (New Century) are not engaged in any legal or arbitration proceedings (either as plaintiff or defendant), including those that are pending or known to be contemplated, which may have or have had a material effect on our financial position or profitability in the past 12 months immediately preceding the date of the lodgment of this offering document with the Authority (Monetary Authority of Singapore)'.
The prospectus also states: 'As at March 31, 2010, the aggregate contract value of our order book amounted to approximately US$5.2 billion which included orders for 83 vessels with a combined tonnage of approximately 10.8 million DWT. The vessels are expected to be delivered between 2010 and 2012.'
Of these 83 vessels are two bulk carriers contracted by Sino Noble Pte Ltd, with a contractual delivery date of 2010, to be built by New Times Shipyard.
Information about the lawsuit and the termination of the shipbuilding contracts was not included in New Century's prospectus, despite the fact that the contracts had been cancelled last November and the arbitration proceedings were commenced against New Times on March 18 - both events taking place before March 31, 2010, which is the latest practicable date prior to the lodgement of the company's prospectus with MAS.
New Century said yesterday that, with the withdrawal of its IPO, all applications are deemed withdrawn and cancelled, and application monies will be refunded to applicants within three market days.
It also thanked the investing community, SGX and the Monetary Authority of Singapore (MAS) 'for their support, as well as their many advisers for their hard work in progressing its IPO application'.
UBS Investment Bank and Morgan Stanley are the joint bookrunners for the IPO. DBS is the sub-placement agent and coordinator of the IPO, while CIMB-GK Securities is the other sub-placement agent.
New Century, based in Jingjiang, China, is ranked fifth domestically in terms of its order book, measured by total deadweight tonnage (the weight a ship can safely carry). It is ranked 13th among shipbuilders worldwide.
Last year, New Century's profit stood at US$343.9 million, while its revenue hit US$1.63 billion.
The company's IPO was Singapore's largest since CapitaMalls Asia's IPO late last year. New Century had offered 560 million shares at a maximum price of S$1.19 each.
