AF Corporation (AFC), a 50:50 joint venture between Aspial and Fragrance Group, has proposed distributing the 881.38 million shares in Singapore-listed AF Global it holds to the joint venture partners, the two companies said in filings to SGX Thursday.
“AFC proposes to undertake the AFC distribution to simplify the holding structure of AF Global. The company is supportive of the AFC distribution as the AFC Distribution will cater the company greater flexibility to deal directly with its AF Global shares,” Aspial and Fragrance each said in separate filings.
AFC holds around 83.49 percent of AFC Global, which invests in and develops properties as well as providing real estate consultancy services, the filing said.
The deal won’t change Aspial’s and Fragrance’s respective effective interests in AF Global, the filings said.
Fragrance said it planned to distribute its 440.69 million AF Global shares to its shareholders upon completion of the AFC deal on the basis of 0.065 AF Global share for each Fragrance share held.
The move would require shareholder approval, and controlling shareholders Koh Wee Meng and his spouse Lim Wan Looi, who hold a total 85.66 percent of Fragrance shares, plan to vote in favor at the extraordinary general meeting on the proposal, Fragrance said.
Fragrance said the proposed distribution to its shareholders, giving them direct ownership of the AF Global shares, would unlock shareholder value.
“The proposed distribution will also give shareholders the flexibility to deal with the AF Global shares independently of their FGL Shares, and benefit from the direct holdings of two distinct entities without any additional cash outlay,” Fragrance said.
In addition, the proposed distribution would increase the trading liquidity of AF Global, which would see its current free float of around 16.05 percent boosted to around 20.41 percent after the distribution, Fragrance said.
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