ST Group Food Industries unit to take majority control in Papparich Australia for A$1.4m

ST Group Food Industries Holdings DRX : DRX 0% announced on Tuesday (Feb 22) that its wholly owned subsidiary STG Food Industries (SFI) will be acquiring a 40 per cent stake in Papparich Australia Pty Ltd (PAPL) from Papparich Group Sdn Bhd (PGSB) for a cash consideration of A$1.4 million (S$1.4 million).

Following the acquisition of 120,000 ordinary shares, the group will increase its equity interest in PAPL from 50 per cent to 90 per cent, giving it majority control in the conduct of the business and affairs of PAPL, said the group in a bourse filing.

PGSB is the ST Group Food Industries' joint venture partner in relation to PAPL and is not a subsidiary or an entity within the group, the company noted.

The sale shares consideration was determined based on arms' length negotiation and was arrived at on a willing-buyer, willing-seller basis, taking into account various factors such as the net tangible asset value of the shares.

Based on the audited financial statements of PAPL for the financial year ended June 30, 2021, the net asset value of the shares stood at A$1.8 million.

Separately, SFI had also entered into a deed of assignment with Fabulous Entity (FESB), a subsidiary of PGSB to acquire the registered trademark rights owned by FESB to the food and beverage brand name PappaRich in Australia and New Zealand for a cash consideration of A$15,000.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The acquisition of the trademark will allow the group to have full autonomy to expand and grow the Papparich brand in Australia and New Zealand, said the group.

PGSB was ordered by the High Court of Malaya in May last year to wind up. A winding-up petition dated May 15, 2020 was filed by Chen Khai Voon against PGSB. Chan Siew Mei of KPMG Deal Advisory Sdn Bhd has been appointed as the liquidator.

Shares of ST Group Food Industries ended Tuesday S$0.018 or 13.9 per cent lower at S$0.112.