Nam Tai's board proposes voluntary liquidation
Nam Tai Electronic & Electrical Products said yesterday the company's board was proposing a voluntary liquidation after its failed privatisation attempt in February.
The company, the first Hong Kong-listed firm to attempt a voluntary winding-up, said the liquidators would distribute no less than HK$1.52 per share, or about HK$300 million, to shareholders.
Trading in Nam Tai shares has been suspended since April 7, when they closed at HK$1.49. The firm currently has US$93 million in net cash and no debt.
'I believe this is already a very good offer price,' said non-executive chairman Koo Ming-kown. 'The company hopes the plan will be approved smoothly this time, although our door is open for any potential independent buyers who may offer a price higher than HK$1.52.'
Nam Tai explained that the company's decision was made owing to low demand for its products, which led to a significant decline in gross and net profit.
In addition, he said, its parent, New York-listed Nam Tai Electronics, had shown no commitment to fund the company.
'I think this is the best and fastest way to protect the rights of shareholders,' Mr Koo said.
The company proposed a privatisation plan in February, saying that from December 2005 to February 2009 its share price had fallen 61.2 per cent to 57 HK cents.
The weak share price had hampered the company's ability to raise funds on the stock market.
The company believed that the privatisation bid, at an offer price of HK$1.50 per share, which represented a 163.2 per cent premium to the 57 HK cents share price on February 20, would enable it to simplify its corporate structure and save administrative costs.
However, the offer lapsed on April 6 after voters representing 88.46 per cent of eligible shares approved the plan at a shareholders' meeting, less than the required 90 per cent.
Nam Tai reported earlier a net loss attributable to shareholders of US$8 million in the first three months on weak demand of end products such as Bluetooth wireless technology for headsets and home entertainment devices. Net income for last year was US$9.6 million.
Sales in the this year's first quarter decreased 30.4 per cent to US$102.2 million, while gross profit margin declined to 7.8 per cent from 13.8 per cent the previous year.
