Stock Takes: Shareholders’ Association will fight ‘unprecedented’ de-listing of QEX Logistics

The NZ Shareholders’ Association will vote proxies against the de-listing of QEX Logistics (QEX) in any upcoming vote of shareholders.

The associationbelieves the move by the company is unprecedented on the NZX.

NZSA believes the future of the company is best decided within the transparency provided by a public listing and the accountability provided by the NZX listing rules, it says.

”The company has stated that it wishes to prepare itself for sale once it de-lists.Should the company de-list, NZSA believes there is an increased risk of further loss of value for shareholders.”

QEX has suffered a number of adverse events over the past few months, including the theft of stock from a Shanghai warehouse, charges being laid by the Ministry of Primary Industries against subsidiary New Y and QEX chief executive Ronnie Xue, the resignation of all other directors and the resignation of its auditor.

The company is currently in a trading suspension as Ronnie Xue is its only remaining director, placing QEX in breach of the minimum director requirement within the NZX listing rules.

Shareholders’ Association chief executive Oliver Mander said the organisation had tried, unsuccessfully, to contact QEX to understand the situation they have found themselves in and to provide more certainty for retail investors.

“In that context, where it is difficult to gain any form of accountability to shareholders over a listed entity, we do not believe that there will be an enhanced opportunity for accountability if the company were to de-list,” he said.

QEX has said delisting was a necessary step to deliver the best possible outcome for its shareholders.

“QEX appreciates that the trading suspension and negative publicity surrounding the company in recent months has caused a high level of uncertainly and it is focused on achieving an outcome that is in the best interests of all shareholders,” the company said in an announcement to NZX.

Mander said the suspension imposed by NZ RegCo had protected potential investors in QEX.

“However, the series of events at QEX is unprecedented for a listed entity in New Zealand and may result in further learning that can better protect existing investors in future”he said.

“NZSA will continue to engage with NZX RegCo to ensure the best possible outcome for QEX shareholders.”

QEX listed in February 2018, facilitating trading in $2.5m of shares that had been raised over the preceding months and incorporating businesses acquired from Ronnie Xue.This was followed by a further $2.5m placement in August 2018 and a share purchase plan raising $1.7m completed in May 2020.

Ronnie Xue continued to own about 70 per cent of QEX Logistics, the Association said.

Just Life buying About Health

Just Life Group (formerly Just Water) said it had agreed to acquire dietary supplements provider About Health for $17 million.

The purchase will be funded through a combination of new and existing debt facilities, and an equity raising.

The acquisition is unconditional and is expected to complete by the end of this month.

Just Life, which supplies water coolers, drinking water and filters for home and office use, said About Health was a leading provider of natural dietary supplements in New Zealand, including well-known brands Lester’s Oil and Res-V Ultimate.

Theacquisition of About Health wouldbe immediately accretive to the group earnings, Just Life said.

“The acquisition of About Health will accelerate the growth of the company and drive shareholder value,” chief executive Tony Falkenstein said.

The acquisition will be fully funded through a combination of debt and equity comprising:
• $15m of new debt facilities provided by Bank of New Zealand.
• A non-underwritten 1 for 14 renounceable rights offer to raise up to about $4.5m at an issue price of $0.70 per share.
• Available headroom under existing debt facilities with Bank of New Zealand.

Just Life Group’s 70 per cent shareholder, The Harvard Group, was supportive of the acquisition and equity raising.

Earlier this week, Just Life Group said it had acquired 60 per cent of the business of Designer Tanks, which supplies water tanks for Kiwi homes, for an undisclosed sum.

Shares in Just Life last traded at 96c, having gained 102.1 per cent over the last 12 months for a market cap of $87m.

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