I will put BSL's EGM MoM into child BPL's thread as it chronicles back to the initial listing of BPL in 2015.
To recap, BPL was listed by way of introduction after parent BSL decided to demerge it. 48.8% of BPL was distributed as dividend in specie to BSL shareholders, while BSL continued to hold onto the remaining 51.8%. With majority ownership even after demerge/listing, BSL was able to continue the consolidation of BPL's P/L and balance sheet onto its own.
So rather than a "clean break" where the entire BPL is distributed to shareholders, it became a tripartite scenario - BSL (biggest shareholder which is a company), FF Wong and family (controlling shareholder of BSL) and minorities. This has created a situation of possible/various conflict of interests as what has happened in the last 12 months.
On hindsight, would a "clean break" had been better? A clean break could have been (1) distributing ALL of BPL to shareholders, followed by an IPO, or (2) Selling a portion of BPL via IPO to raise some funds and then distribute remaining to BSL shareholders.
A clean break would have truly made BPL "independent" per say? And this clean break, often could have attracted outside 3rd parties to eventually consider/offer to buy BPL in its entirety? Based on a few examples from my head - LHN Logistics from LHN Group, Xinghua Port Holdings from Pan United..these subsidiaries with "clean breaks" were eventually sold to 3rd parties.
Value creation was then fully realized.
But maybe regardless of how it is done, BPL can never fully break from BSL due to its importance in terms of earnings, transferability of resources between BSL's different BUs and the future transformation to an "asset light" model.
MINUTES OF THE EXTRAORDINARY GENERAL MEETING OF BOUSTEAD SINGAPORE LIMITED
The key reasons for the demerger included:
• unlocking shareholders’ value through a separate valuation; and
• financial independence and direct access to capital markets for BPL
The BPL Board and management worked extremely hard and delivered a true value-unlocking moment with the successful launch of the Boustead Industrial Fund on 4 March 2021, which led to a record BPL net profit for FY2021 of S$131.7 million during the pandemic and a record BPL dividend of 14.5 cents per share. The BPL share price responded well for a short period and peaked cum dividend, but thereafter collapsed ex-dividend despite the real value creation that took place.
From that point onwards, there was a downtrend in the BPL share price, in spite of announcements on 5 May 2022 of the successful creation of a second real estate fund in Vietnam, and on 18 July 2022, of a record S$300 million engineering and construction contract. From August 2021, shortly after the ex-dividend share price collapse until December 2022, the Company began to acquire shares from the open market through multiple transactions to increase its stake in BPL.
Throughout BPL’s entire listed life, trading liquidity was thin until the Company launched the VGO. There were 136 market days with zero trades and not a single new substantial shareholder could be attracted into the shareholder register despite the real value creation that took place.
https://links.sgx.com/FileOpen/Boustead%...eID=782710