Ellipsiz BIX , through its wholly-owned subsidiary, Ellipsiz Agro Investments Pte. Ltd. (EAIPL), has acquired an additional 40% stake in Ise Capital Management for $4.0 million on April 10.
The acquisition, which was completed on the same day, brings Ellipsiz’s stake in Ise Capital Maangement to 80%. The acquisition was done by way of a share transfer from Ise Hikonobu.
Hikonobu was the majority shareholder of Ise Capital Management. He was also chairman and honorary advisor of Ise Foods Inc., which is the top egg producer in Japan and the sixth largest egg producer in the world.
Following the acquisition, Hikonobu will now own a 13.3% stake in Ise Capital Management.
Ise Capital Management owns 70% of the issued and paid-up shares Ise Foods Holdings, a company that was incorporated in Singapore on Nov 6, 2020. Ise Food Holdings mainly produces and distributes fresh eggs as part of its business.
As at April 10, Ise Foods Holdings has an issued and paid-up share capital of $20.0 million comprising 20.0 million ordinary shares.
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Vertex Ventures SEA Fund IV Pte. Ltd. and Vertex Exploratory Fund Pte. Ltd. hold the remaining 30% shares in Ise Foods Holdings in total.
According to Ellipsiz, the additional acquisition will provide it with an additional source of income, as well as enable it to broaden its operations and reduce its concentration of risks further in the semiconductor and electronics industry. In addition, the acquisition will allow Ellipsiz to “contribute positively” to Singapore’s “30 by 30” food security goal.
Ise Foods Holdings, on Oct 25, 2022, received in-principle approval from the Singapore Food Agency (SFA) to construct a commercial egg farm. The farm will be Singapore’s fourth. It has a commercial egg farm, a day-old-chick (DOC) hatchery, a parent stock pullet farm, and a parent stock layer farm. The SFA was said to have carved out three plots of land with a total area of around 12.1 hectares to Ise Foods Holdings. The agency subsequently entered into a building agreement with Ise Foods Holdings.
In its statement, Ise Foods Holdings says it will apply for the farm and import licences from SFA to carry out the egg production business “at the appropriate time”.
Business operations of the farms are to commence in phases with the commercial egg farm to begin operations in 2024. The farms are expected to be fully operational by end 2026 with the capacity to produce no less than 360 million hen shell eggs per year.
For the eight months ended Feb 28, the Ise Capital Management group reported a net loss before income tax and non-controlling interests of $1.4 million. Based on Ellipsiz’s 80% interest in Ise Capital Management, the net loss attributable to the company was approximately $1.1 million.
If the acquisition had been completed on June 30, 2022, Ellipsiz’s net tangible assets (NTA) per share for the FY2022 would have been at 59.85 cents on a pro forma basis, up from its actual NTA per share of 59.64 cents.
However, on a pro forma basis, Ellipsiz’s earnings per share (EPS) for the FY2022 would have fallen to 1.15 cents from 1.55 cents as the farms have not commenced operations yet. The EPS is also computed after adjusting for Ise Capital Management group’s net loss.
Shares in Ellipsiz closed flat at 23.5 cents on April 10.
