Camsing Healthcare to receive S$11.3m investment to boost Nature's Farm business

Paige Lim
Published Mon, Dec 27, 2021 · 04:04 PM

MAINBOARD-listed Camsing Healthcare on Monday (Dec 27) said it executed an investment and loan agreement in a bid to boost its retail business Nature's Farm, which has been struggling since it was hit by the Covid-19 pandemic.

The investor is Qiren Holdings, a wholly-owned company of Lin Qiren, who also owns and leads financial service organisation Qiren Organisation. Qiren Organisation is also an authorised representative of insurer AIA Singapore.

Through the investment agreement, Camsing will be raising gross investment proceeds of S$11.3 million. The transaction comprises the allotment and issue of 102.2 million Camsing shares at S$0.042 apiece, as well as the exercise of all 167.8 million options at an exercise price of S$0.042 for each share.

Camsing intends to use 41 per cent or S$4.6 million of the investment proceeds for expenses related to sales and marketing business initiatives, and 31 per cent or S$3.5 million of the proceeds for expenses related to new product sourcing and launching.

The transaction will see Qiren Holdings become a 90 per cent shareholder of Camsing, while reducing the shareholding stake of Creative Elite Holdings, the group's current largest shareholder, from 83.4 per cent to 8.3 per cent.

Under a separate loan agreement, Qiren Holdings will also loan Camsing up to S$1.3 million in 3 tranches, at an interest rate of 12 per cent per annum until the date the loan is fully repaid.

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Outstanding amounts owed by Camsing to Qiren Holdings under the loan agreement may be used to offset Qiren Holdings' total amount to be paid under its investment agreement.

For illustration purposes, both the investment and loan agreement will result in a narrowing of Camsing's loss per share for the financial year ended January 2019 (FY2019) to S$0.02 from S$0.22. Net asset value per share for FY2019 would have fallen to S$0.05 from S$0.14.

The group will convene an extraordinary general meeting to seek shareholders' approval for the proposed investment, as well as to change Camsing's name to one that is mutually agreed between Qiren Holdings and the company.

If required by the Securities Industry Council, Camsing will also seek shareholder approval for a whitewash resolution which Qiren Holdings intends to obtain a waiver for.

Noting that the financial condition of Camsing has "deteriorated significantly" since the suspension of the trading of its shares, and the outbreak of the Covid-19 pandemic, the group said the prevailing market price of its underlying shares is no longer representative of its valuation.

It has therefore conducted an independent valuation, which concluded that the market value of equity interest in Camsing is "reasonably stated" as S$900,000. This implies a market value of about S$0.03 per share.

Camsing said that after conducting a major strategic review, it found that Nature's Farm's weaknesses include a limited product range and a lack of branding strength. The brand was also slow to digitise and develop online strategies, according to the group.

As such, the group deems the financing by Qiren Holdings as critical to the recovery and turnaround of Nature's Farm - and by extension, of the group.

It also noted Qiren Holdings demonstrated a "clear interest" to inject fresh funding into the group due to the potential and status of Nature's Farm as a home-grown brand.

With its latest proceeds from the funding, Camsing intends to conduct a comprehensive review and expansion of the product range offered by Nature's Farm. It also intends to update the business's brand image at all of its physical and online outlets, while ramping up publicity efforts through collaborations and joint marketing projects.

The group further intends to accelerate social media efforts for the brand, build up business-to-business collaborations and outsource non-essential functions through such collaborations for greater revenue accretion with an asset-light model.

Camsing said it will overhaul the current digital strategy of Nature's Farm with the aim of "leapfrogging beyond the traditional model of online sales and to capitalise on emerging digital opportunities involving apps, loyalty tokens, e-wallets, blockchains and the metaverse".

Shares of the group have been suspended from trading since Apr 1, 2019.

READ MORE:

  • Camsing Healthcare's subsidiary Nature's Farm CEO suspended
  • Camsing Healthcare's subsidiary receives letter of demand for S$2.21m plus interest
  • SGX RegCo to refer Camsing Healthcare's special audit report to relevant authorities
  • 3 former Camsing Healthcare IDs explain why they resigned

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