Since KTL Global completed its acquisition of Tianci Agritech in June this year, marking its first foray into the fresh produce business, it has been making efforts to expand this new business segment. On July 12, the group announced its acquisition of a 51% stake in fresh produce e-commerce platform EBuy for a consideration of $1.476 million.
EBUY supplies daily fresh vegetables and fruits as well as dried provisions to food service providers, retailers, restaurants and hotels, and has also extended its services to individual households island wide with supplies of fresh and dried provisions. EBUY also manufactures dim sum and noodles and is capable of packing orders on a real-time basis.
According to the memorandum of understanding (MOU), this acquisition will be satisfied by way of issuance of new ordinary shares in KTL Global.
The MOU also states that additional consideration may be payable to EBuy, and shall be satisfied by way of issuance of further new ordinary shares in the capital of KTL. This will be subject to KTL achieving a net profit after tax (NPAT) of at least $1 million for FY2022 ending May 2022, the issuance of such number of new additional ordinary shares of KTL, the aggregate value of which is equivalent to the value of three times the NPAT of EBuy in FY2022, based on the prevailing 30-day average share price of KTL prior to the issue date of the EBuy's relevant audit report.
Additional consideration is also subjected to EBuy achieving at least $3 million in NPAT for FY2023, the issuance of such number of new additional ordinary shares of KTL the aggregate value of which is equivalent to the value of three times the NPAT of the EBuy in FY2023, based on the prevailing 30-day average share price of KTL prior to the issue date of EBuy's audit report.
The additional consideration provided that the aggregate value of the consideration and the additional Consideration is capped at $15 million or the total number of shares, which are issued by KTL in satisfaction of the consideration and sdditional consideration, is capped at 29% of the enlarged share capital of KTL, whichever is the lower.
Chin Teck Oon, executive director of KTL says, “This is a landmark step in our strategic development plans to the transformation of our consumer-centric business model and also contribute to Singapore’s food security strategy. We see tremendous potential to build on EBuy’s established distribution platform, technology capabilities and customer base, drawing on our combined experience, network and resources to further scale and capture new growth opportunities within the fresh produce and consumer market in Singapore.”
Shares in KTL Global closed 9.5% higher on July 12 at 12 cents.
Photo: Unsplash
