It has now been six months since Pelikan’s May 23rd announcement regarding the sale of their assets and business interest to Holdham SAS, a holding company for the French based Hamelin stationery group. I have seen several comments since then that have attributed some of the company’s recent design choices as well as the surfeit of October releases to the direction and perhaps over exuberance of new ownership. In actuality, it appears that the company has yet to officially change hands, not surprising when you consider the complexity of the entities that now need to be disentangled. While there hasn’t been much information made available in the public domain, a few recent regulatory filings do shed some light onto the current state of affairs. When Pelikan entered into the conditional share purchase agreement (CSPA) with Holdham, they hired KAF Investment Bank Berhad (KAF IB) to advise and negotiate the terms of the transaction. A filing with the proposed arrangement was first made to Bursa Malaysia Securities Berhad on June 29th. In that document, a “Long Stop Date” was established. Specifically, the filing stated, “If the Conditions Precedent have not been satisfied by (and including) 31 October 2023 (“Long Stop Date”), any party may, within 10 business days as from such date, at its entire discretion, terminate the CSPA by written notice to the other party…” A few additional stipulations were attached to that statement which you can read about here if so inclined. October 31st has come and gone so where do we now stand? Continue reading below to find out.

KAF IB filed an announcement on behalf of the Pelikan board on October 19th, twelve days prior to the deadline set forth in the original CSPA. That announcement stated “…the Parties have on 19 October 2023 entered into an amendment to the CSPA to mutually agreed to extend the Long Stop Date from 31 October 2023 to 31 December 2023.” This would indicate that the sale is still in progress and not yet completed. At the outset, the late October timeline seemed a bit optimistic so this extension should not necessarily come as a surprise or raise undue alarm. In a further sign that Pelikan’s disinvestment from its prior holdings is ongoing, there have been a few subsequent filings just this month.

As part of the original sale proposal, there was a “Proposed Capital Repayment” which is how Pelikan intended to pay part of the disposal consideration. That proposal was described as follows;

“Solely for illustration purposes only, the tentative amount proposed to be distributed under the Proposed Capital Repayment is RM452.40 million whereby the Company’s share capital shall be reduced from RM640.27 million to RM187.87 million (through cancellation of RM452.40 million in capital), which will be distributed to the shareholders whose names appear in the Company’s Record of Depositors on an entitlement date, which will be determined and announced by the Board later, by way of cash distribution of RM0.75 for each ordinary share in PICB (“PICB Shares” or “Shares”) held on the said entitlement date.”

On November 7th, KAF IB, again acting on behalf of Pelikan’s board, announced that the High Court of Malaysia had granted an order confirming the reduction of the share capital of the company pursuant to the proposed capital repayment. As such, the company’s legal counsel was instructed to proceed with extracting the sealed order and lodge the same with the Registrar of Companies. The latest filing by KAF IB dated November 16th indicated that this process was completed as of November 15, meaning the proposed capital repayment took effect on that date as outlined in the corporate filings.

That is all we know at present, largely based on the complex legalese of regulatory filings. As opaque as they may be, those filings do serve as a rudimentary way of gauging how the proceedings are unfolding. To my untrained eye, I see no outward signs of concern and suspect that the transaction continues to be carried out, just along a somewhat longer timeline than originally forecasted. At this pace, it is likely that we will see the new French owners take the reins of the company sometime in the first quarter of 2024. Stay tuned for any additional news on this matter which I will relay as it becomes available.

References

• Corporate Announcements to Bursa Malaysia Securities Bhd. General Announcements. Pelikan International Corporation Berhad. Last accessed 11/25/23.