SINGAPORE (Dec 21): The past weeks have been rough for coffee shop chain operator Kimly, whose IPO on Catalist last year was among the most sought after. The group’s first major acquisition since its listing on Catalist has been rescinded.
Its executive chairman Lim Hee Liat and executive director Chia Cher Khiang are under investigation by the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD), and have had their passports impounded.
See: Kimly chairman Lim and executive director Chia arrested, out on bail
And on Dec 18, the company released a six-page business update, a move one observer says is meant to reassure investors that the coffee shop business is still intact despite the upheavals.
See: Kimly says daily operations not affected by arrests of chairman, executive director
Since these chain of events started, shares in Kimly dropped 14%, but saw some recovery after the business update announcement, closing at 24 cents on Dec 20. However, the stock is down more than 30% YTD.
Furthermore, Kimly had to cancel its acquisition of Asian Story Corporation (ASC). It had previously on July 2 paid for the deal using $16 million in cash.
The termination, the group said, was due to Pokka terminating its manufacturing deal with ASC. But the terms between Pokka and ASC are still unclear. Kimly has since had $12 million from the deal returned to it, but will see the rest of the $4 million repaid over three years.
With the acquisition out of the way, the group says that it will be concentrating on the organic growth of its core coffee shop business and beefing up its online food delivery services.
Find out more in this week’s issue of The Edge Singapore (Issue 862, week of Dec 24), on sale now at newsstands.
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