Pacific Shipping Trust

[kennynah]

thanks for sharing Tony

[tonylim]

The Delisting and the Exit Offer are conditional upon, among other things,

1. the SGX-ST agreeing to an application by PST to delist from the Official List of the SGX-ST,

2. the resolution for the Delisting being passed at an extraordinary general meeting of PST, and

3. the Offeror having received, by the close of the Exit Offer, valid acceptances that, when taken together with the Units owned, controlled or agreed to be acquired by the Offeror, will result in the Offeror holding not less than 75% of the total voting rights attributable to the Units in PST (the “Minimum Acceptance Condition”)

Hope some friends here can enlighten why 75% voting right is a must for the offeror , as minimum Acceptance Condition. Thanks .

[tonylim]

Published December 14, 2011, Business Times

PST minority shareholder criticises report by IFA
He says it fails to consider factors such as revenue from new ships

By JAMIE LEE


AN institutional investor of Pacific Shipping Trust (PST) - which is being taken private by its holding company - has criticised the financial adviser's analysis of the deal, which has determined that the current takeover offer price as fair.



PST went on an acquisition blitz last year, acquiring nine vessels for charter that should all be delivered by Q2 of 2013.






The analysis did not account for the significant boost to revenue from ship acquisitions that were announced a year ago that could, in turn, raise the distribution per unit (DPU), said Stuart Hong, who holds 1.8 per cent of PST through his investment firm Unisysco Holdings.

Mr Hong also told BT that the peer comparison with the two other shipping trusts - Rickmers Maritime and First Ship Lease Trust - was not well executed because the advisers did not fully consider the impact of PST's stronger creditworthiness on its valuation.

In early October, holding company Pacific International Lines proposed to buy up the remaining 40 per cent of PST that it does not own. The shipping firm offered 43 US cents in cash per unit, representing a 14.7 per cent premium over the last-traded price of 37.5 US cents at the point of the announcement.

But the shipping trust - the first to be listed in Singapore in 2006 - went public at 45 US cents per unit.

The shipping trust went on an acquisition blitz last year, acquiring nine vessels for charter that should all be delivered by the second quarter of 2013.

By Mr Hong's estimates, these acquisitions that are tied to charter agreements could double revenue - an issue that was said to have not been considered by the appointed independent financial adviser (IFA), PricewaterhouseCoopers Corporate Finance (PwCCF). Without reviewing any forecasts, PwCCF was said to have reported to the independent directors that the privatisation deal was fair.

'It's about information inequality,' said Mr Hong, who has been investing in the shipping trust since January 2009. Financial forecasting of shipping trusts is easier compared to an operating company under normal circumstances, added Mr Hong.

'One of the main reasons is that your revenues is roughly the daily charter rate times 365. Annual revenues will roughly double, as a result of these acquisitions, and I think that is material.'

PST noted that it would cut its minimum income distribution starting the third quarter of 2009 to 70 per cent from 90 per cent, saying that it wanted to retain cash to fuel future growth.

'So effectively, my money is helping to fund the 2010 acquisitions,' said Mr Hong. 'If the offeror wants to buy my shares, I am entitled to know what PST bought with my money. By that, I need to see the P&L forecasts for the acquisitions.'

Turning to the peer comparison - a common practice by financial advisers - Mr Hong claimed that the poorer creditworthiness of PST's peers was not reflected. For example, First Ship, which has a S&P's rating of BB- for its long-term debt, was negotiating to secure a significant loan facility at the time that the PwCCF report was released - a point that was said to have not been raised in the report.

It was only a few days later that First Ship said that it had secured a term loan of US$479.6 million that came with a 'substantially higher' interest margin than its last loan facility.

In response to queries, PST said that these concerns can be addressed by the IFA at this Friday's extraordinary general meeting, which will be held for unitholders to vote on the deal. PST units closed unchanged at 42 US cents yesterday.