SINGAPORE mainboard-listed Sino Grandness Food Industry Group is looking to list its most profitable business in Hong Kong.
It has submitted an application on March 31 to the Hong Kong Stock Exchange (HKSE) to list its wholly owned subsidiary Garden Fresh Group, a Sino Grandness filing published the same day showed. Singaporean bank DBS is the sole sponsor of the listing.
"Having Garden Fresh listed on the HKSE puts us closer to its main customer base, and gives us an additional platform to tap into equity and capital," said chairman and chief executive officer of Sino Grandness Jack Huang in Mandarin on Tuesday in an interview with The Business Times.
"It really is the icing on the cake," he added.
Upon completion of the spin-off, Sino Grandness is expected to directly own, through its subsidiary Grandness HK, 63.96 per cent of the issued share capital of Garden Fresh, the HKSE application documents show.
At the same time, bondholders of Garden Fresh, which include Goldman Sachs, have the option to exchange 370 million yuan (S$77 million) worth of convertible bonds into shares of the newly-listed company.
There are also plans to change the name of Garden Fresh to "Grandness Group" or any other name Sino Grandness deems appropriate, Sino Grandness said in its March 31 announcement.
Sino Grandness began as a canned food producer catering mainly to Europe. It then ventured into the beverage business after getting listed on the Singapore Exchange (SGX), first introducing loquat juices under the Garden Fresh brand in 2010.
Garden Fresh now accounts for about 70 per cent of Sino Grandness' turnover, Mr Huang noted.
Last year, Garden Fresh juices represented 86.3 per cent of the 4.7 billion yuan loquat juice market in China. The market is expected to grow at a compound annual growth rate of 23.3 per cent over the next five years, according to market research firm Euromonitor.
Sino Grandness' counter on the SGX rose by one Singapore cent on Tuesday, closing at S$0.67 apiece.