Hunter Maritime, which is currently in the process of trying to complete their business combination with NCF Wealth Holdings Limited, announced that they have commenced a tender offer to purchase up to 2,173,750 of its Class A common shares at a purchase price of $10.215 per share. The Tender Offer will expire at 5:00 p.m. New York City time on March 15, 2019, unless extended or terminated.
As a refresher, Hunter is domiciled in the Marshall Islands, but they are also classified as a “Foreign Private Issuer (FPI). As such, an FPI cannot do a vote by proxy, they must do a vote by tender offer, per the FPI rules. However, the amount for the Tender Offer is a little curious. If you recall, at the time of the last Tender Offer to extend their completion deadline to April 23rd (which was offered at $10.125 per share), Hunter stated they would be contributing $0.03 per share for every month needed, starting on November 23rd. Since then, Hunter has contributed an additional $0.09. Hence, this is why they are offering shareholders to Tender at $10.215 ($10.125 + $0.09).
However, what about all the interest? According to our estimates, the current amount per share (including interest) in Hunter’s trust is $10.24. Potentially $10.25 by March 15th, when the Tender offer expires.
As we well know by now, Hunter’s prospectus allows management to use any interest earned for working capital. But by not offering shareholders some of that interest at the time of a Tender….well, that’s what got them into a whole big mess at the first go-around.