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SunMoon in S$4.1 m divestment deal
SINGAPORE-LISTED SunMoon Food Company has entered into an agreement to sell its subsidiary United Agro Produce Pte Ltd (UAPL) and its dehydrated business for S$4.1 million to Global Food Ingredients Pte Ltd (GFI).
The agreement also involves the sale of UAPL's subsidiaries, Taian FHTK Foodstuffs Co, Fook Yong Pte Ltd, and an indirect subsidiary, Taian Fook Huat Tong Kee Foodstuffs Co. These subsidiaries directly or indirectly own assets in Tai'an, China.
The divestment of the dehydrated business and the UAPL subsidiaries is in line with SunMoon's decision in 2015 to move to an asset-light, consumer-centric, brand-focused business model.
SunMoon said the disposal of the factory, land, land use rights and associated equipment and business under UAPL and its subsidiaries in China will raise cash to fund the Singapore-listed parent's other business ventures.
The sale agreement with GFI is conditional upon SunMoon obtaining shareholders' approval for the divestment at an extraordinary meeting.
The purchase consideration, which will become payable on completion of the transaction, will be paid in three tranches of equal instalments. On a proforma basis, the divestment will see net tangible assets per share reduced to 1.923 Singapore cents from 3.511 Singapore cents as at Dec 31, 2015.