Feb 15, 2013
Leading Indonesian Packaged Food Producer Acquires 14.95% Stake In China Minzhong
- Business synergies between two listed food companies, opening the door to potential regional collaborations in future.
- Net proceeds of approximately S$85 million to be used for building new industrial farming capacities and working capital purposes.
Singapore, 15 February 2013 - China Minzhong Food Corporation Limited (中国闽中食品有 限公司) ("China Minzhong" or "Company" and together with its subsidiaries, the "Group") (SGX: K2N.SI; Bloomberg quote: MINZ SP), today announces the allotment and issue of 98,000,000 new ordinary shares in the Company ("New Shares") to PT Indofood Sukses Makmur Tbk (IDX : INDF) (the "Subscriber" or "Indofood") at S$0.915 per New Share (the "Subscription Price") (the "Proposed Subscription").
The Subscriber is a company incorporated in Indonesia and is listed on the Indonesia Stock Exchange. Indofood's and its subsidiaries' ("Subscriber Group") operation ranges from the production of raw materials and their processing through to consumer products in the market. Their business activities can be classified into four complementary Strategic Business Groups, namely:
- Consumer Branded Products Group, which is led by PT Indofood CBP Sukses Makmur Tbk ("ICBPM"), a company incorporated in Indonesia and listed on the Indonesia Stock Exchange. ICBP is one of the leading packaged food producers in Indonesia, producing a wide range of packaged food products including noodles, dairy products, food seasonings, snack foods as well as nutrition and special foods for infants and children and milk products for expectant and lactating mothers;
- Bogasari Group, which is primarily a producer of wheat flour and pasta;
- Agribusiness Group, which is led by Indofood Agri Resources Ltd, a company incorporated in Singapore and listed on the Singapore Exchange Securities Trading Limited ("SGX-ST"). The Agribusiness Group is a vertically integrated and diversified agribusiness group that engages in the business of oil palm plantations and edible oil and fats. In addition, the Agribusiness Group is also involved in the cultivation and processing of rubber and sugar cane as well as other crops; and
- Distribution Group, which covers the distribution of the majority of the Subscriber Group's consumer products as well as third party products.
The Subscription Price represents a discount of 9.93% over the weighted average price of the Company's shares of S$1.0159 for trades done on the SGX-ST for the full market day on 14 February 2013. The New Shares will represent approximately 14.95% of the issued and paidup share capital of the Company immediately following the completion of the Proposed Subscription. The net proceeds of approximately S$85 million will be used for the Company's planned expansion of its industrialised farming operations and the balance thereof will be used as general working capital.
Commenting on this, the Group's Executive Chairman and CEO, Mr. Lin Guo Rong (林国荣) said, "We are pleased to attract the keen interest from our new shareholder. With Indofood's long-standing track record in the food industry and China Minzhong's experience in agriculture and food processing, there are a lot of potential synergies between our businesses such as strategic cooperation in supply chain and product distribution in the fast moving markets of China and Indonesia. Our strongholds in different geographical regions and product segments will open the door to new business opportunities and we look forward to leveraging on each other's strengths and experiences to broaden our market exposure in the future."
China Minzhong recently announced its 2QFY2013 financial results, reporting a 23.6% rise in net profit to RMB215.8 million, on the back of a 32.3% increase in revenue to RMB860.9 million. This was underpinned by improved performances across both the Group's Cultivation and Processed business segments.