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SATS forms joint venture with global food company BRF
SATS'S Singapore Food Industries (SFI) has entered into a joint venture agreement with BRF GmbH to set up a company in Singapore to process meat and manufacture branded food products for distribution to retailers, restaurants, wholesalers, distributors and ship chandlers.
To be named SATS BRF Food, the company will have an issued and paid-up share capital of S$48 million consisting of 48 million ordinary shares of S$1 each. SFI will hold 24.48 million ordinary shares while BRF GmbH will hold 23.52 million ordinary shares, representing 51 per cent and 49 per cent equity stakes respectively.
Under the terms of the joint venture (JV) agreement, SFI will first transfer its food distribution business to SATS BRF Food, in exchange for 100 per cent of the shares in the capital of the JV company. Concurrently with the business transfer, SFI will transfer 49 per cent of the entire issued and paid-up share capital of SATS BRF Food to BRF GmbH at an aggregate cash consideration of S$26 million.
Alex Hungate, president and chief executive officer of SATS said: "We already have a successful relationship with BRF, bringing high-quality meat into Singapore. Together, we can scale up our meat processing to become more productive and to innovate new branded food offerings for the growing middle classes in Asia."
Following the transfer of its food distribution business to SATS BRF Food, SATS and its subsidiaries will continue to operate their retort manufacturing, institutional catering and abattoir operations.