KTL Global to acquire 51% stake in e-commerce platform EBuy for S$1.5m

Yong Jun Yuan

Published Thu, Apr 21, 2022 · 11:57 PM

MAINBOARD-LISTED KTL Global is proposing to acquire a 51 per cent stake in e-commerce platform EBuy for S$1.5 million, subject to a valuation exercise on the sale shares.

The consideration will be paid out in new shares issued in the company valued at S$0.092 per share. This represents a discount of approximately 8.18 per cent to the volume-weighted average price of S$0.1002 per share for trades done on the Singapore Exchange for the week before the memorandum of understanding was entered into in July last year.

Additional consideration may also be paid out in 2023 and 2024 if Ebuy achieves a positive net profit after tax for the 12-month financial period ending June 30, 2023 and June 30, 2024 respectively. The additional consideration would be equivalent to 3 times the value of Ebuy’s net profit after tax for each 12-month period.

KTL Global said in a bourse filing on Thursday (Apr 21) that the acquisition was the “next logical step” for the group as it expands its supply and distribution business. The group had earlier acquired vegetable and fruits supplier and distributor Tianci Agritech for S$200,000 in June last year.

With the acquisition, the company hopes to facilitate the expansion of Tianci Agritech’s business by leveraging on the capabilities and network available to Ebuy.

KTL Global also said that it has been looking for potential business areas to diversify ever since the Covid-19 pandemic impacted its customers for its branding, operation and procurement services.

lt noted that Tianci Agritech had previously sold vegetables to Ebuy and that both chief executive Chin Teck Oon and the vendor are business acquaintances.

According to the bourse filing, Ebuy posted a net loss before tax of approximately S$0.26 million for the 12-month period ended Dec 31, 2021, while net loss in the same period attributable to the sale shares came in at approximately S$0.13 million.

Shares of KTL Global are currently suspended from trading. The counter is also in SGX watch-list.