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Vibrant : LETTER TO SHAREHOLDERS IN RELATION TO THE PROPOSED RENEWAL OF THE SHARE BUYBACK MANDATE

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08/14/2019 | 09:52pm EDT

LETTER DATED 15 AUGUST 2019

THIS LETTER IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

This Letter is issued by Vibrant Group Limited. If you are in any doubt as to the action you should take, you should consult your bank manager, stockbroker, solicitor, accountant or other professional adviser immediately.

If you have sold or transferred all your shares in the capital of Vibrant Group Limited, you should immediately forward this Letter, the Notice of Annual General Meeting and the enclosed Proxy Form to the purchaser or the transferee or to the bank, stockbroker or agent through whom you effected the sale or transfer for onward transmission to the purchaser or the transferee.

The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Letter.

VIBRANT GROUP LIMITED

(Incorporated in the Republic of Singapore)

(Company Registration No. 198600061G)

LETTER TO SHAREHOLDERS

IN RELATION TO

THE PROPOSED RENEWAL

OF THE SHARE BUYBACK MANDATE

IMPORTANT DATES AND TIMES:

Last date and time for lodgment of Proxy Form

: 28 August 2019 at 9.30 a.m.

Date and time of Annual General Meeting

: 30 August 2019 at 9.30 a.m.

Place of Annual General Meeting

: 51 Penjuru Road, #04-00

Freight Links Express Logisticentre

Singapore 609143

CONTENTS

Page

LETTER TO SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

1.

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

2.

RENEWAL OF THE SHARE BUYBACK MANDATE . . . . . . . . . . . . . . . . . . . . . . . . .

2

2.1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

2.2

Rationale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

2.3 Authority and Limits on the Share Buyback Mandate for which Renewal is

Sought .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 4

2.4

Status of Shares Bought Back . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 7

2.5

Treasury Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 8

2.6

Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 9

2.7

Financial Effects of the Share Buyback . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 9

2.8

Listing Rules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 15

2.9

Taxation

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 16

2.10

Reporting Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 16

2.11

Listing Status on SGX-ST . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 17

2.12

Take-over Implications under the Take-over Code . . . . . . . . .

. . . . . . . . . . . . . 17

2.13

Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 21

3.

DIRECTORS' RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 21

4.

DIRECTORS' RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 21

5.

DISCLAIMER .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 21

6.

DOCUMENTS AVAILABLE FOR INSPECTION . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 22

APPENDIX A

-

GUIDELINES ON SHARE BUYBACKS . . . . . . . . . .

. . . . . . . . . . . . . 23

APPENDIX B

-

SHARES HELD BY THE DIRECTORS AND

SUBSTANTIAL

SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 26

1

LETTER TO SHAREHOLDERS

VIBRANT GROUP LIMITED

(Incorporated in the Republic of Singapore)

Co. Reg. No. 198600061G

Board of Directors:-

Registered Office:-

Sebastian Tan Cher Liang, PBM

51 Penjuru Road #04-00,

(Independent Non-Executive Director and Non-Executive Chairman)

Freight Links Express

Khua Hock Su

Logisticentre,

(Non-Executive Director and Group Adviser)

Singapore 609143

Eric Khua Kian Keong

(Executive Director and CEO)

Henry Chua Tiong Hock

(Executive Director and CCDO)

Derek Loh Eu Tse

(Independent Non-Executive Director)

15 August 2019

To: The Shareholders of Vibrant Group Limited

(the "Shareholders")

Dear Sir/Madam,

  1. INTRODUCTION
    We refer to item 9 of the Notice of the Annual General Meeting of the Company (the "2019 AGM") which is an Ordinary Resolution ("Resolution 9") to be proposed at the 2019 AGM for the renewal of the Company's share buyback mandate (the "Share Buyback Mandate"). Rule 881 of the Listing Manual provides that a company may purchase its own shares if it has obtained the prior specific approval of its shareholders in a general meeting. The purpose of this letter is to provide Shareholders with information relating to Resolution 9.
  2. RENEWAL OF THE SHARE BUYBACK MANDATE

2.1 Background

At the annual general meeting of the Company held on 28 December 2018 (the "2018 AGM"), Shareholders had, INTER ALIA, approved the Share Buyback Mandate. The authority and limitations on the Share Buyback Mandate were set out in a letter dated 13 December 2018 which was enclosed together with the notice of the 2018 AGM (the "2018 AGM Notice") and the Ordinary Resolution relating to the adoption of the Share Buyback Mandate was set out in item 7 of the 2018 AGM Notice. The Share Buyback Mandate was expressed to take effect from the date of the 2018 AGM at which the Share Buyback Mandate was approved (the "2018 Approval Date") up to the earliest of:-

  1. the date (being a date after the 2018 Approval Date) on which the next annual general meeting of the Company is held or required by law to be held;
  2. the date (being a date after the 2018 Approval Date) on which the share purchases are carried out to the full extent mandated under the Share Buyback Mandate; or

2

LETTER TO SHAREHOLDERS

  1. the time when the authority conferred by the Share Buyback Mandate is revoked or varied by the Shareholders of the Company in general meeting.

Accordingly, the directors of the Company (the "Directors") propose that the Share Buyback Mandate be renewed at the 2019 AGM.

Under the existing Share Buyback Mandate approved at the 2018 AGM, Shareholders authorised the buyback of up to 69,249,132 issued ordinary shares in the capital of the Company ("Shares"). As at 1 August 2019 (the "Latest Practicable Date"), the Company had purchased or acquired an aggregate of 5,460,560 Shares by way of On-Market Purchase (as defined in paragraph 2.3.3 below) pursuant to the Share Buyback Mandate approved by Shareholders at the 2018 AGM. The highest and lowest price paid was S$0.5015 and S$0.1643 per Share respectively and the total consideration paid for all purchases was S$1,980,105.70. As at the Latest Practicable Date, 5,460,560 Shares purchased or acquired by the Company were held as Treasury Shares (defined below) and none were held as Subsidiary Holdings (defined below).

Any purchase or acquisition of its Shares by the Company has to be made in accordance with, and in the manner prescribed by, the Companies Act, Cap. 50 of Singapore (the "Companies Act"), the listing rules (the "Listing Manual") of the Singapore Exchange Securities Trading Limited (the "SGX-ST"), the Constitution and such other laws and regulations as may for the time being be applicable. It is also a requirement of the Companies Act that before a company purchases or acquires its own shares, its Constitution must expressly permit the company to purchase or otherwise acquire the shares issued by it. Regulation 50A of the Constitution provides that the Company may, subject to and in accordance with the Companies Act and any other relevant legislation, rules or regulations enacted or prescribed by any relevant authority from time to time, purchase or otherwise acquire its Shares on such terms and in such manner as the Company may from time to time think fit.

During the validity period of the Share Buyback Mandate, the Directors may exercise the authority conferred by the Share Buyback Mandate from time to time or at any time, in accordance with its terms, to purchase or otherwise acquire issued Shares.

Shareholders should note that purchases or acquisitions of Shares pursuant to the Share Buyback Mandate would only be made by the Directors as and when (i) the Company is solvent; (ii) circumstances permit; and (iii) only if the Directors are of the view that such purchases or acquisitions are in the best interests of the Shareholders. No purchases or acquisitions of Shares would be made in circumstances which would have a material adverse effect on the financial position of the Company or the Company and its subsidiaries (the "Group"). It should also be noted that purchases or acquisitions pursuant to the Share Buyback Mandate may not be carried out to the full extent mandated, or to such an extent that would, or in circumstances which might, result in a material adverse effect on the financial position of the Company or the Group. The Companies Act further stipulates that a payment for such purchase of shares shall include any expenses (including brokerage or commission) incurred directly in the purchase or acquisition of Shares. It is an offence for a Director or manager of the Company to approve or authorise the purchase or acquisition of Shares, knowing that the Company is not solvent.

3

LETTER TO SHAREHOLDERS

For the purposes of the foregoing paragraph, the Company is deemed "solvent" if:-

  1. the Company is able to pay its debts in full at the time of the payment for the purchase or acquisition of the Shares and will be able to pay its debts as they fall due in the normal course of business during the period of 12 months immediately following the date of the payment; and
  2. the value of the Company's assets is not less than the value of its liabilities (including contingent liabilities) and will not after the proposed purchase or acquisition become less than the value of its liabilities (including contingent liabilities).

In determining that the Company is solvent, the Directors must have regard to the most recently audited financial statements, other relevant circumstances, and may rely on valuations or estimates of assets or liabilities that are reasonable in the circumstances. In determining the value of contingent liabilities, the Directors may take into account the likelihood of the contingency occurring, as well as any counter-claims by the Company.

  1. Rationale
    The renewal of the Share Buyback Mandate will give the Company the flexibility to undertake share purchases or acquisitions up to the 10% limit described in paragraph 2.3.1 below at any time, subject to market conditions, during the period when the Share Buyback Mandate is in force.
    The rationale for the Company to undertake the purchase or acquisition of its issued Shares is as follows:-
    1. In managing the business of the Group, management strives to increase Shareholders' value by improving, INTER ALIA, the return on equity of the Group. Share purchase is one (1) of the ways through which the return on equity of the Group may be enhanced.
    2. The Share Buyback Mandate is an expedient, effective and cost-efficient way for the Company to return surplus cash which is in excess of the financial and possible investment needs of the Group to its Shareholders. In addition, the Share Buyback Mandate will allow the Company to have greater flexibility over, INTER ALIA, the Company's share capital structure and its dividend policy.
    3. Share repurchase programmes help buffer short-term share price volatility and off-set the effects of short-term speculators and investors and, in turn, bolster Shareholder confidence and employee morale.
  2. Authority and Limits on the Share Buyback Mandate for which Renewal is Sought
    The authority and limitations placed on the Share Buyback Mandate for which renewal is sought are summarised below:-
    2.3.1 Maximum Number of Shares

  3. Only Shares which are issued and fully paid-up may be purchased or acquired by the Company. In accordance with Rule 882 of the Listing Manual, the total number of Shares which may be purchased or acquired by the Company pursuant to the

4

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Disclaimer

Vibrant Group Limited published this content on 15 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 August 2019 01:51:03 UTC

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