Accrelist defends MClean divestment terms, buyer independence to SGX

Divestment details and pricing

Catalist-listed Accrelist yesterday defended its proposed RM30 million (US$7.4 million) sale of a 24.37 per cent stake in Malaysia-listed MClean Technologies. This followed queries from the Singapore Exchange (SGX) regarding the transaction's structure, pricing, and the identities of the purchasers.

Accrelist had proposed on 15 September to offload 60 million MClean shares to 12 individual buyers at RM0.50 each. This price represents a 33 per cent discount to MClean’s market trading price of approximately RM0.75 observed before the announcement. Accrelist justified the pricing by citing an independent valuation in April, which assessed the shares between RM0.45 and RM0.47. The company noted a discount was necessary to attract buyers for such a large, illiquid block of shares.

Buyer independence under scrutiny

The SGX questioned how Accrelist’s board confirmed that the 12 purchasers were not acting in concert with each other or with MClean insiders. This was particularly relevant as Accrelist stated it was unaware of the buyers' selection process.

In response, Accrelist clarified that it relied on confirmations from Sam Soong, a remisier at CGS International Securities Malaysia, who had gathered the purchasers. Mr Soong confirmed each buyer approached him separately.

Additionally, MClean’s directors, executive officers, and Wong Chin Ho, who introduced Mr Soong to Accrelist, provided assurances that no such arrangements existed with the buyers.

Funding capability questions

The Singapore Exchange also sought evidence of the purchasers' financial capacity to complete the RM30 million transaction, noting that no deposit was collected and completion could extend up to nine months. Accrelist stated it did not obtain direct evidence of the buyers’ financial capability for the share sale agreements.

Instead, the company is relying on the legal obligations within the contracts, where purchasers provided warranties that their funds originate from legitimate sources. Accrelist highlighted its entitlement to claim specific performance, legally compelling the buyers to complete the proposed disposal.

Shareholder vote and liquidity goals

The proposed major transaction requires shareholder approval at an extraordinary general meeting scheduled for tomorrow, 1 October, as well as approval from Bursa Malaysia. Accrelist expects to secure the necessary approvals. The company stated that the divestment aims to realise value for the group and enhance its liquidity position.

Accrelist previously acquired its 28.5 per cent stake in MClean for RM9 million, later selling 10 million shares at RM0.25 each. Accrelist shares closed at S$0.171 on Tuesday, down 4.5 per cent or S$0.008, prior to the news.