FOOD and beverage manufacturer Food Empire signed a non-binding term sheet to issue Asean private equity fund manager Ikhlas Capital Singapore up to US$40 million in redeemable exchangeable notes.
Ikhlas Capital is licensed by the Monetary Authority of Singapore with on-ground presence in Singapore, Kuala Lumpur, Jakarta and Manila.
The fund manager focuses on growth, transformation and cross-border value creation.
Ikhlas Capital’s investment will be made into a special purpose vehicle (SPV) that is wholly owned by Food Empire.
It will come with the option to hold a portfolio of business operations, including Food Empire’s South-east Asian and South Asian businesses.
On Monday (Jun 24), the mainboard-listed group said it intends to expand its business in these regions through its partnership with Ikhlas Capital.
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As Food Empire’s strategic investor, Ikhlas Capital will inject an initial US$40 million capital in the SPV via a five-year redeemable exchangeable note, and a 5.5 per cent annual interest based on terms and structures to be finalised in a definitive agreement.
The deal will give Ikhlas Capital the right, but not obligation, to exchange the notes into new Food Empire shares at S$1.09 apiece.
Proceeds from its new strategic partnership and proposed note issuance will be used to drive Food Empire’s capital expenditures, as well as mergers and acquisitions in South-east Asia and South Asia.
“The board believes that beyond capital injection, Ikhlas Capital’s local presence, knowledge and network in South-east Asia will help the group further accelerate growth and scale in South-east Asia and internationally,” said Food Empire.
It also highlighted Ikhlas Capital’s founding partners as “well-known Asean professionals who have spent a combined total of more than 100 years of their careers in the region, and are highly recognised leaders in their respective professional fields and countries”.
Shares of Food Empire closed flat at S$1.01 on Friday.
