Korean biotech firm takes second shot at Singapore backdoor listing
Singapore
A SOUTH KOREAN steelmaker controls a firm that makes kimchi lactobacillus (lactic acid bacteria) is trying again to secure a listing for the latter biotech firm by a backdoor route.
Stainless steel manufacturer Kossen, a key shareholder of BiogenicsKorea, has signed an implementation agreement with Epicentre Holdings (the former authorised Apple retailer) and Tardis Capital, said Epicentre's judicial managers (JMs) on Wednesday.
Under the agreement, Epicentre is to transfer its listing status on the Singapore Exchange's Catalist board for S$3 million to an unnamed entity that will be incorporated in Singapore, with KOSDAQ-listed Kossen's support.
Tardis Capital, a Singapore-based mergers-and-acquisitions advisory firm, had introduced Kossen and the transferee to the JMs.
The unnamed transferee is in the business of manufacturing, wholesale and retail of lactobacillus health products, said the Epicentre filing.
Kossen will procure the transferee's incorporation in Singapore, and later ensure that the transferee owns all shares of BiogenicsKorea.
Seoul-based BiogenicsKorea's website says it makes lactobacillus from kimchi, the Korean fermented vegetables.
This is not the first time Kossen and Biogenics have surfaced in a potential transfer-of-listing status.
Just five months ago, 8Telecom inked a memorandum of understanding (MOU) with the steelmaker to transfer its listing status to BiogenicsKorea. Tardis Capital was also the introducer for that proposed transaction, and the adviser to both Korean firms.
The mainboard-listed telecom infrastructure group, which is still under judicial management, in March updated that the MOU's validity had been extended to April 10 "due to unforeseen circumstances caused by the Covid-19 pandemic, resulting in delays in implementation".
However, Tardis Capital's managing director Rohit Sen told The Business Times (BT) on Thursday that the MOU lapsed as the parties did not sign an implementation agreement.
Bloomberg data showed that Kossen has been loss-making in recent years, sinking deeper into the red last year with a net income loss of 56.8 billion won (S$65.7 million), from a 10.3 billion won loss in 2018.
Kossen says on its website that it makes and sells stainless steel pipes and tubes; it also has a natural-gas vehicle business with engineering and conversion services, and a solar power business.
In response to BT's queries, corporate governance advocate Mak Yuen Teen said on Thursday that the Singapore Exchange (SGX) "should review carefully" the proposed transfer of Epicentre's listing status and other such backdoor listings.
These deals enable shareholders of Singapore-listed firms to monetise the shell companies, but "what gets injected in may not be good for the market", said Prof Mak, an academic at NUS Business School.
He also asked why a South Korean firm like BiogenicsKorea would be keen to list in Singapore, instead of in its home market.
Epicentre was placed under judicial management late last year, after creditor Goh Chee Hong filed an application to claim a S$3 million sum arising from a loan he had provided the company.
In December, Epicentre's former acting chief executive officer and executive chairman Kenneth Lim was reported to be facing a bankruptcy petition for a judgment debt of more than S$500,000.
8Telecom, on its part, was served an originating summons taken by Top Capital Securities in March 2019 to put the mainboard-listed company into judicial management, for failing to repay about S$1.7 million in share subscription consideration. 8Telecom went under judicial management in November 2019. The judicial management order has since been extended till Nov 16, 2020.
