The capital injection would go into a special-purpose vehicle owned by Food Empire, in exchange for five-year redeemable exchangeable notes at 5.5% annual interest
FOOD Empire Holdings will receive a capital injection of US$40 million through a strategic partnership with private equity fund manager Ikhlas Capital.
In a bourse filing on Tuesday (Aug 20), the F&B manufacturing and distribution company announced that Ikhlas Capital would inject the funds into a special-purpose vehicle wholly-owned by Food Empire, in exchange for five-year redeemable exchangeable notes at 5.5 per cent annual interest.
Both parties signed a non-binding term sheet in June regarding the notes.
The vehicle will hold or have the option to hold a portfolio of business operations, including the group’s business in South-east Asia and South Asia.
The notes are exchangeable for new ordinary shares in the capital of Food Empire at an exchange price of S$1.09 a share at any time 24 months after the closing date up to the maturity date; they are also convertible into new ordinary shares in the vehicle’s capital.
The company said that the funds are expected to accelerate its plans in both regions by driving capital expenditure, as well as mergers and acquisitions.
The company noted that in the first half of this year, revenue from the South-east Asia and South Asia segments grew 34.8 per cent and 36 per cent, respectively. It further expects growth momentum to continue into the latter half of the year.
Food Empire chief executive Sudeep Nair said: “As an Asean-focused fund with a dynamic network of investors and regional expertise, (Ikhlas Capital) are the best partners to support us as we shift our focus to South-east Asia and South Asia.”
Shares of Food Empire closed at S$0.97, up S$0.01 or 1 per cent on Tuesday before the announcement was made.
