Thomson Medical to spin off real estate business via distribution in specie of RSP shares
SINGAPORE (Nov 12): Thomson Medical Group intends to spin off its real estate business to its existing shareholders via a distribution in specie by way of capital reduction.
In addition, the group is proposing to further reduce the group’s capital to streamline its capital structure and write off accumulated losses.
Both initiatives are subject to shareholders’ approval at an extraordinary general meeting to be held on Dec 4 at 2.00pm
Currently, Thomson Medical owns the real estate business through wholly-owned subsidiary RSP Holdings.
The real estate businesses comprise the group's entire interests in its design and engineering and hospitality businesses.
Thomson Medical shareholders will be entitled to one RSP share for every one ordinary share in Thomson Medical they own.
An exit alternative in the form of cash will be provided to minority shareholders who do not wish to hold RSP shares after the proposed distribution.
An independent financial advisor will be appointed to determine the "fairness and reasonableness" of the cash alternative.
Further details regarding the cash alternative would be made at a later date.
“This move is in line with our current focus in developing and growing our healthcare business as well as our plans to divest the real estate business. It will lead to us becoming a pure healthcare company, and will allow management to focus on capturing the growing demand for quality healthcare in this region,” says Ng Ser Miang, Chairman of Thomson Medical.
Upon completion of the restructuring, RSP would hold entirely Thomson Medical's real estate business and cease to be a subsidiary of the group.
Thomson Medical on Friday reported 3Q18 earnings halved to $1.1 million from $2.2 million a year ago.
The group’s profit from continuing healthcare operations fell 45% to $5.1 million in 3Q18, largely due to higher operating expenses owing to business expansion and cost inflation of goods, services and wages.
See: Thomson Medical Group posts 48% drop in 3Q earnings to $1.1 mil on higher operating expenses
As at 2.30pm, shares in Thomson Medical are trading at 7.8 cents.
