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SUNMOON Food Company is looking to expand into the fruit-selling business in China. It has proposed to acquire a 51 per cent stake in Harvest Season Singapore, having entered into a conditional sale and purchase agreement to acquire 510,000 ordinary shares of the latter.
This will be paid for through an allotment and issuance of 60 million new ordinary shares in the capital of SunMoon to vendor Fresh Fresh; this constitutes approximately 18.82 per cent of SunMoon's current issued share capital.
At 5.18 Singapore cents per SunMoon share, the purchase consideration works out to about S$3.11 million.
The conditional sale and purchase agreement - entered into on Wednesday - is with Fresh Fresh and vendor warrantors Zhang Jiang Quan and Ong Yaw Teh.
Harvest Season SG was set up by Fresh Fresh for the proposed joint venture between SunMoon and Mr Zhang. It will have the rights to operate fruit stores under the name of Harvest Season Group in China.
Mr Zhang operates six fruit stores under Harvest Season Group in and around Shanghai.
On the rationale behind the proposed acquisition, SunMoon said: "The company believes that it can tap on and benefit from this growing consumption in China of fruit staples through retail and online delivery channels by acquiring a controlling stake in Harvest Season SG, which will, by completion, have a cash and NTA (net tangible assets) position of at least S$3 million earmarked for working capital and the development of more stores in China."