SGX should also provide its approval in-principle for the offer, and for ASA to issue new shares as consideration for the offer.
This is also pre-conditional on the ASA’s shareholders’ approval in a general meeting.
The formal offer announcement will only be made if such pre-conditions are met, in which ASA is planning to offer two of its new shares for each offer share, 0.5 cents per share.
ASA, whose principal activities are manufacturing electromechanical components and parts for the semiconductor and consumer electronics industries, says that the acquisition of ASTI can lead to synergies that will result in better business prospectus, operational efficiency and increased cost savings.
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ASA also notes that ASTI’s board of directors have failed to deliver on their promises when they took over the company almost two years ago.
“Instead of focusing on delivering their promises, the current board of the company relentlessly tried to sue the offeror to collect alleged debts but was eventually forced to withdraw those suits and pay the offeror costs of $12,000, thus wasted money for both the company and the offeror,” ASA notes.
Those alleged debts came about at a time when ASTI and the ASA were associated with each other and had no corporate benefit to the ASA.
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Post-offer, ASA intends to amalgamate the semiconductor businesses of both companies; either list the enlarged semiconductor business on a reputable stock exchange via IPO or other means; or distribute all the net cash consideration received pursuant to the trade sale of ASA’s shareholders.
Shares in Advanced Systems Automation closed flat at 0.5 cents on Jan 14.
