Nutryfarm didn't give loan updates when SGX queried because it was 'premature', says board

MAINBOARD-listed Nutryfarm International did not disclose potential developments involving third-party loans or legal proceedings against the company when queried by the bourse this month because the board believed it was premature to do so, it said on Thursday (Jan 20).

Such information was also not believed to have been material or the likely cause of unusual share price movements and trading activity, the board added in its bourse filing.

But significant price movements on Jan 17 and 18 - a week after the initial query from the Singapore Exchange - pushed Nutryfarm to call a trading halt, which the board said was to check with its creditor whether there were developments that the company was unaware of.

Nutryfarm has been in talks with creditor Corpbond IV Ltd to potentially restructure third-party loans that amounted to some HK$126.9 million (S$21.9 million) as at June 30, 2021.

The loans are set to expire between March and November 2022. Under the possible restructuring plan, the loans would become convertible bonds that mature beyond 2022 - a move that Nutryfarm said could strengthen its balance sheet, should the bonds be converted to equity.

But the board has now also told shareholders that Nutryfarm has yet to reach any definitive agreement with Corpbond on a restructuring, and there is no guarantee that it may be able to do so or what the terms achieved would be.

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Separately, Nutryfarm's board disclosed that pre-action discovery proceedings were commenced against the company last Dec 14 by an individual claiming to have provided funding for some loans that were later novated to Corpbond.

"The company understands that the relief sought by the individual in these proceedings relates only to whether the company is required to disclose these documents to the individual and does not concern the merits of the allegations made by the individual," the board said; it added that "no claim or demand has been initiated by the individual against the company at this time".

Legal advisers have been appointed to represent the company in the proceedings, it also noted.

Nutryfarm was asked by the SGX on Jan 10 whether it was aware of any reasons - including information not previously disclosed - that could explain the unusual trading in its shares. The company responded in the negative at the time, and has now laid out its reasoning in doing so.

Nutryfarm shares last traded at S$0.099. The company called a trading halt on Jan 18, which the board considered to be a prudent decision pending enquiries with Corpbond.