22 October 2008 - The Directors of Super Coffeemix Manufacturing Ltd. wish to announce that the Company is proposing to restructure the Group and the businesses of the Group in the manner set out in this announcement.
Business Activities of the Group
The Group is primarily an integrated manufacturer of instant beverages and convenience food products that are marketed and distributed globally (the “F&B Business”). The Group is a pioneer in the manufacture of 3-in-1 beverage products. As at the date of this announcement, the Group has about [13] manufacturing facilities located throughout the region in Singapore, Malaysia, PRC, Myanmar, Indonesia and Thailand and the distribution of its products span across approximately 52 countries worldwide.
Since its establishment, the Company has also diversified its business scope and expanded into the manufacture of other food products such as potato chips and vinegar in the PRC (“Other Food Business”) as well as property development in the PRC (“Property Development Business”). The Company has also acquired quoted securities in some companies listed on the SGX-ST whose businesses are synergistic with that of the Group’s (“Investment Business”).
Proposed Restructuring Exercise
At present, the Company is the direct holding company of a majority of its subsidiaries which carry on the F&B Business. The Company also undertakes the F&B Business directly and is an operating company of the F&B Business in Singapore. The Other Food Business and Property Development Business are carried on by associated companies held directly by the Company. The quoted securities under the Investment Business are also held directly by the Company.
The objective of the Restructuring Exercise is to streamline and rationalise the existing structure and the different business divisions of the Group. The intention is keep the Company as a pure investment holding company by divesting the F&B Business to a new wholly-owned subsidiary of the Company to be incorporated (the “NewCo”), such that the Company will cease to be an operating company. The Company will remain the investment holding company of the other associated companies which operate the Other Food Business and the Property Development Business, as well as the quoted securities under the Investment Business.
The proposed Restructuring Exercise will involve the transfer of all the business assets and undertaking connected with the F&B Business, including the subsidiaries of the Company which carry on the F&B Business, to the NewCo. The effect of the proposed Restructuring Exercise is that the F&B Business will thenceforth be held and operated solely by the NewCo and its subsidiaries, while the Company will remain the 100% holding company of the NewCo.
Rationale
The proposed Restructuring Exercise will keep the Company solely as an investment holding company with no business operations. This will limit the liabilities which the Company may be exposed to as an operating company. In addition, the new structure will also minimise the exposure of each business division to the risks running from other business divisions.
The proposed Restructuring Exercise will also achieve a clear division between the core business of the Group and other non-core businesses. This will allow the Group to better focus on its core F&B Business, and enhance operational efficiency to achieve greater growth. Further, management structure and focus may be improved by allowing each business division to concentrate on devising and implementing business plans which are designed and catered for each division’s requirements.
The proposed Restructuring Exercise will also facilitate any possible joint ventures and alliances with and/or investments by other strategic investors and/or partners in the F&B Business or other non-core businesses of the Group.
Shareholders and potential investors should note that the Company is currently not engaged in any discussions with any potential party to merge or acquire any of its business divisions or to establish joint ventures or strategic alliances.
Accordingly, shareholders and investors are advised to exercise caution when trading in the shares of the Company.
Shareholders’ Approval
The Company will seek Shareholders’ approval for the proposed Restructuring Exercise. A circular containing further details of the proposed Restructuring Exercise, and enclosing a notice of extraordinary general meeting in connection therewith, will be dispatched to Shareholders in due course.
Financial Impact
The proposed Restructuring Exercise is not expected to have any financial impact on the financial position or performance of the Group.
Interests of Directors and Substantial Shareholders
None of the Directors or substantial shareholders of the Company have any interests or are deemed to be interested in the proposed Restructuring Exercise.