KTL Global, the offshore services firm, has announced that it has acquired Tianci Agritech, a private company that sells and distributes fresh vegetable and fruit produce, including the import and export of fruits and vegetables and growing of leafy and fruit vegetables.
KTL Global, on June 3, entered into a sale and purchase agreement (SPA) with Tianci’s sole shareholder Phuah Kin Huat. Under the SPA, KTL will acquire a 100% stake in Tianci Agritech for a consideration of $200,000.
Following the acquisition, Tianci will be a wholly-owned subsidiary of KTL Global.
According to the filing on June 3, Phuah is an acquaintance of KTL’s executive director Chin Teck Oon, though both parties – as well as both businesses – are not related.
However, Chin says he will be sitting out on the decision making process in connection with the proposed acquisition.
Tianci was incorporated only on April 9 and has yet to commence business activities save for its entry into supply contracts with two suppliers in Malaysia.
Under the SPA, the parties have agreed that Tianci will have a balance of at least $170,000 in its account upon the completion of the acquisition.
The proposed acquisition has allowed the group to first enter the business of supplying and distributing vegetables and fruits produce to various consumer groups in Singapore at a “relatively low initial cost”.
This is also based on research conducted that food demand and consumption in Singapore has been on the rise. The group says it expects the trend to continue to increase.
The expected increase is likely to increase demand for raw and, or perishable food products, which in turn, may allow the group to tap into the expanding consumer market.
In addition, the group reveals that its existing branding, operation and procurement (BOP) business has been “less than satisfactory” especially with the Covid-19 outbreak resulting in a significant impact on its customers in China.
Given the current performance of its BOP business, the group expects to report a net loss for the financial year ended Dec 31, 2020.
Shares in KTL closed 0.1 cent lower or 1.5% down at 6.6 cents on June 3.
