Khong Guan buys 30% stake in plant-based meat alternatives maker

KHONG Guan has signed a shareholders' agreement effective Monday with SGProtein founders and investors to invest in a 30 per cent stake in the producer and seller of plant-based meat alternatives for S$1.5 million in cash.

The paid-up share capital of SGProtein is expected to be S$3.95 million, comprising 2.08 million new shares. The deal will result in SGProtein becoming Khong Guan's associated company.

The founders will be the key management personnel that supervise the operations of SGProtein.

In a filing to the Singapore Exchange, the biscuit manufacturer said: "This investment is in line with our broader strategy for increasing shareholders' value through growth, leveraging on our management's expertise and experience in the food businesses.

"The proposed investment in SGProtein represents a new and exciting opportunity for growth for the company in Singapore and the region, which are expected to offer a nascent but growing and potentially sizeable market for plant-based food products."

The investment in SGProtein will be funded through internal resources, and is not expected to have any material impact on Khong Guan's net tangible assets and earnings per share for FY21.

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In addition, Khong Guan chairman Chew Soo Lin and Michael Chew (son of managing director Chew Soo Eng) have each agreed to subscribe personally for new shares in SGProtein amounting to 2 per cent. Both do not have any existing interest in SGProtein prior to this.

The audit committee is of the view that the risks and rewards for the company and each of the Mr Chews are in proportion to their respective interest in SGProtein, and the terms of the investment are not prejudicial to the company's and its shareholders' interests.

Khong Guan's shares last closed at S$1.36 on March 15.