Axington’s proposed acquisition of food manufacturing group expected to lead to reverse takeover

AXINGTON has inked a non-binding memorandum of understanding to acquire a 100 per cent stake in food manufacturer Mushan Food Industries and 3 other sister companies in a deal that is expected to result in a reverse takeover of the Catalist-listed cash company.

In a bourse filing on Monday (Jul 18) night, Axington announced that the understanding — which was inked in the same day — will form the broad basis of the definitive agreements to be entered into within a month with the vendors in the proposed acquisition of the sake in Mushan Food Industries; Mushan Foods; Vitamax Food International; and Vitamax Food Beverages. The vendors involved in the deal are Lim Boon Chay; Tan Soo See; Tan Soo Seng; and Wong Sin Ting.

Mushan Food Industries is a manufacturer of instant beverages and snacks. It was initially set up to make and distribute ground coffee powder, and later concocted the first 3-in-1 instant cereal beverage which was launched under the Vitamix brand.

The food manufacturer, along with its 3 sister companies, have 2 production facilities in Malaysia and China. The group’s head office is in Singapore.

The proposed acquisition will be subject to further negotiation between the parties involved following a due diligence review by Axington on Mushan Food Industries and the 3 sister companies.

Further information on the payment terms will be provided by Axington when the sale and purchase agreement is signed.

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However, the deal is subject to a string of conditions, including the resumption of trading of the company and the delivery of written undertakings by Dorr Global Healthcare International — the controlling shareholder of the company — to vote in favour of the proposed acquisition.

Axington is the company linked to the Bellagraph Nova saga. It does not currently have any revenue-generating business and faces delisting if it does not acquire a new business.

Last July, the Catalist-listed company proposed a S$405 million acquisition of a 60 per cent stake in Hong Kong’s Veivo Web Technology. However, the deal later fell through as talks with the vendor were not fruitful.