Japfa jumps 10.8% on plans to list separate China dairy unit

Singapore

SHARES of Japfa jumped on Wednesday (Mar 30), after the agri-food company announced plans to list its China dairy unit in Hong Kong and distribute its entire shareholding in the company to its existing eligible shareholders.

Japfa ended the day S$0.07 or 10.8 per cent higher at S$0.72 after climbing as much as 13.1 per cent.

At 10.03am, its shares had eased slightly to S$0.71, up S$0.06 or 9.2 per cent, with 10 million shares worth S$7.2 million changing hands. No married deals were recorded, according to ShareInvestor data.

In a bourse filing on Tuesday night, Japfa said it has applied to list its dairy unit in China, AustAsia Investment Holdings, on the mainboard of the Stock Exchange of Hong Kong.

As part of a capital reduction exercise related to the listing, Japfa is also proposing a distribution-in-specie of its entire shareholding in AustAsia, which will see eligible shareholders receiving AustAsia shares in proportion to their respective shareholdings in Japfa, with no cash outlay required from shareholders. Japfa said the listing will unlock value for shareholders, by creating 2 separate businesses and providing each entity's management the operational flexibility and the ability to concentrate on their respective core business.

In addition, the company will be able to better focus its financial resources on its animal-protein business without needing to plan for AustAsia's funding requirements as well.

Meanwhile, the proposed distribution is expected to provide Japfa shareholders greater clarity on the respective value and business of its animal-protein segment and AustAsia.

If the proposed distribution takes place, Japfa will cease to hold any AustAsia shares, and the latter will cease to be a subsidiary of the company.