Food Empire to issue up to US$40 million in redeemable exchangeable notes
Proceeds from the new strategic partnership with Ikhlas Capital and proposed note issuance will be used to drive Food Empire’s capital expenditures
FOOD and beverage manufacturer Food Empire signed a non-binding term sheet to issue Asean private equity fund manager Ikhlas Capital Singapore up to US$40 million in redeemable exchangeable notes.
Ikhlas Capital is licensed by the Monetary Authority of Singapore with on-ground presence in Singapore, Kuala Lumpur, Jakarta and Manila.
The fund manager focuses on growth, transformation and cross-border value creation.
Ikhlas Capital’s investment will be made into a special purpose vehicle (SPV) that is wholly owned by Food Empire.
It will come with the option to hold a portfolio of business operations, including Food Empire’s South-east Asian and South Asian businesses.
On Monday (Jun 24), the mainboard-listed group said it intends to expand its business in these regions through its partnership with Ikhlas Capital.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
As Food Empire’s strategic investor, Ikhlas Capital will inject an initial US$40 million capital in the SPV via a five-year redeemable exchangeable note, and a 5.5 per cent annual interest based on terms and structures to be finalised in a definitive agreement.
The deal will give Ikhlas Capital the right, but not obligation, to exchange the notes into new Food Empire shares at S$1.09 apiece.
Proceeds from its new strategic partnership and proposed note issuance will be used to drive Food Empire’s capital expenditures, as well as mergers and acquisitions in South-east Asia and South Asia.
“The board believes that beyond capital injection, Ikhlas Capital’s local presence, knowledge and network in South-east Asia will help the group further accelerate growth and scale in South-east Asia and internationally,” said Food Empire.
It also highlighted Ikhlas Capital’s founding partners as “well-known Asean professionals who have spent a combined total of more than 100 years of their careers in the region, and are highly recognised leaders in their respective professional fields and countries”.
Among the co-founders of Ikhlas Capital is Nazir Razak, younger brother of former Malaysian prime minister Najib Razak.
Prior to co-founding the private equity fund manager, Nazir served as CIMB’s chairman from 2014 to 2018, after helming the Malaysian retail banking company as its group chief executive from 1999 to 2014.
Other co-founders include CDL Hospitality Trusts director Kenny Kim; former Indonesian minister of trade Gita Wirjawan; and Cesar Purisima, who served as the Philippines’ secretary of finance during Benigno S Aquino III’s time as president until 2016.
Shares of Food Empire were trading S$0.03 or 3 per cent higher at S$1.04 as at 10.06 am on Monday, after news of its partnership.
Copyright SPH Media. All rights reserved.
