Albedo refutes Malaysian report of scuttled RTO deal
Report in The Star Online said to have triggered plunge in share price
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Report in The Star Online said to have triggered plunge in share price
Kenneth Lim
A planned reverse takeover (RTO) deal is still on, steel materials supplier Albedo said yesterday, refuting a Malaysian news portal report that it said could have caused the stock to tumble in the morning.
“The parties to the proposed acquisition have not reached any mutual agreement - verbal, written or otherwise - to terminate the proposed acquisition,” Albedo said in a reply to a Singapore Exchange (SGX) query. “The company is also concurrently seeking clarification from the vendor on this matter, and will be releasing a separate announcement shortly.”
Shares of Albedo fell as much as 53.8 per cent or 2.8 cents to a low of 2.4 cents yesterday and were last trading at three cents (down 42.3 per cent or 2.2 cents) before trading in the stock was halted.
The Star Online report cited unnamed sources as saying that the proposed reverse takeover deal between Albedo and a company controlled by Malaysian tycoon Danny Tan had been aborted after both sides failed to agree on terms.
The planned reverse takeover, which has helped Albedo’s stock to more than double since the first related announcement in August 2013, will involve Mr Tan injecting several land parcels in the Iskandar development in Malaysia into Albedo in exchange for control of Albedo.
The sharp morning sell-off led to a trading query by SGX at about 10.07 am. Albedo called for a share trading halt at 10.15 am.
Voyage Research head Roger Tan said: “The Star article has created great turmoil in Singapore in the stock. A lot of shortists are taking advantage to short the counter.”
The reverse takeover is critical to the outlook for Albedo, which recently announced a further net loss of $1.2 million for the year ended December, Mr Tan added.
“When Albedo made the announcement that they were going to go into Iskandar, the shares shot up quite a bit,” he said. “The Star article has claimed it’s not going to go through, and the price has come down, which means investors were really hoping for this to go through.”
While acknowledging that Albedo probably needed time to react, Mr Tan said that it would have been ideal if the company could have responded faster.
“I think the moment that they see this article in the morning . . . the company should have taken immediate steps,” he said.
David Gerald, president of the retail shareholder advocacy group Securities Investors Association of Singapore, said that it would be better if Albedo could shed some light on the timing of its actions.
“Timely information is required from companies to maintain an orderly market,” Mr Gerald said.