Glencore, via its indirect wholly-owned subsidiary Singfuel Investment, is offering $0.3552 per share for all Chemoil shares “not already owned, controlled or agreed to be acquired by the offeror and parties acting in concert with the offeror”, Chemoil said on Friday.
The mandatory cash offer comes after the completion of Glencore’s acquisition of majority stake in Chemoil from the Chandran family trust on Friday.

Glencore has acquired 656.78 million of Chemoil shares, representing a 50.81% stake in the company, for $233.28 million from the trust, according to DBS Bank, which acted on behalf of Singfuel Investment.

Glencore intends to make a separate proposal to holders of non-transferable options in Chemoil, it added.

Meanwhile, Chemoil warned that its listing status on the Singapore Exchange (SGX) will be affected if Glencore succesfully acquired more than 90% of its shares.

“The SGX-ST may suspend the trading of the shares on the SGX-ST until such time when the SGX-ST is satisfied that at least 10% of the shares (excluding treasury shares) are held by at least 500 shareholders who are members of the public,” Chemoil said.

However it added: “It is the current intention of the offeror [Glencore] to maintain the listing status of Chemoil on the SGX-ST following completion of the offer.

“However, in the event Chemoil does not meet the minimum public float required under the Listing Manual at the close of the offer, the offeror [Glencore] reserves the right to re-evaluate its position, including its right of compulsory acquisition.”

According to Singapore law, Glencore is entitled to exercise its rights to compulsorily acquire the remaining shares if it received acceptance for not less than 90% of the offer shares. The acceptance of offer should be received within “the period of four months from the date of despatch of the offer”, Chemoil added.

Apart from Glencore, Chemoil is 37.5% held by Itochu Corp while the remaining 11.7% shares are publicly traded on SGX.

Chemoil has appointed Ernst & Young Corporate Finance as the independent financial adviser to Chemoil directors who are considered independent for the purposes of the offer.

The company on Thursday reported a 75.6% plunge in 2009 net profit to $11.5 million, compared to net profit of $47.1 million in 2008.

Shares of the company settled $0.370 per share on Thursday.