MAINBOARD-LISTED KTL Global has proposed to acquire all 200,000 shares of Tianci Agritech for S$200,000, as part of broader plans to diversify into the business of fresh food distribution in Singapore.

Locally incorporated in April 2021, Tianci is a producer and distributor of vegetables and fruits. Its sole director, Chin Teck Oon, is also an executive director at KTL Global.

Tianci's shares are held entirely by businessman Phuah Kin Huat, an acquaintance of Mr Chin.

While both parties know each other personally, they are not related. Mr Phuah does not have any connection nor business relationship with KTL Global, its directors and/or substantial shareholders, said the group in a regulatory filing on Thursday.

As at Thursday, Mr Phuah does not have any interest, direct or indirect, in the shares of KTL Global. Mr Chin does not hold any interests, direct or indirect, in Tianci, save for his directorship.

The proposed acquisition therefore does not constitute an "interested person transaction". However, Mr Chin has agreed to abstain from deliberating and making any recommendation to the board regarding the acquisition, said the group.

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KTL Global - through its subsidiaries - provides branding, operation and procurement (BOP) services.

It said the proposed acquisition will allow it to diversify its business risks - in respect of both its customer base and supply chains - beyond its existing BOP business which is centrally focused on customers in China.

The acquisition will allow the group to first enter into the business of supplying and distributing fresh produce to various consumer groups here at a "relatively low initial cost", taking into consideration the net asset value of Tianci and the supply contracts already secured.

Tianci has yet to commence business activities, apart from its entry into supply contracts with two suppliers in Malaysia. No financial statements or management accounts have been or will be prepared on or prior to the completed acquisition, said the group.

As such, KTL Global said it does not have information on the book value or the net tangible asset value attributable to Tianci's sale shares. Notwithstanding the above, it has been agreed that Tianci will have a balance of at least S$170,000 in its bank account post-acquisition.

Earlier in May, the group received a writ of summons dated April 14 by the solicitors of the chief of Vibrant Group, Khua Kian Kheong.

This comes after the company received a letter of demand dated March 19, 2021 from Mr Khua claiming a sum of S$933,900, being the sum which he allegedly paid on April 20, 2015 to acquire 5.5 million shares in the company. The writ of summons had been served in connection with the claim.

KTL Global is currently on the Singapore Exchange watch-list.

Firms are placed on the watch-list if they record losses for the three latest consecutive financial years and have an average daily market cap of under S$40 million over the last six months.

Shares of KTL Global closed down 0.1 Singapore cent or 1.5 per cent to 6.6 cents on Thursday.