News
Food Empire Launches IPO With Offer Of 86 Million Shares At S$0.13 Each
SINGAPORE - 17 April 2000 - Food Empire Holdings Limited, a homegrown food and beverage manufacturer and marketer of instant beverage products, is offering 86 million new shares at S$0.13 each in conjunction with its Main Board listing on the Singapore Exchange (SGX).
Of the total, 17.2 million shares will be offered to the public while the remaining 68.8 million shares will be placed out. The placement tranche includes up to 8.6 million shares reserved for employees, independent directors and business associates of the Group.
The offer of 86 million shares represents approximately 25% of Food Empire's enlarged share capital of 344 million shares. Based on this post-invitation share capital and the issue price, Food Empire will have a market capitalization of close to S$45 million.
According to Food Empire, the net proceeds arising from the issue of new shares is estimated at S$10.3 million which will be used for the following:
The share offer, which opens 17 April 2000, will close at 12 noon on 25 April 2000. The manager of the issue is UOB Asia Limited while the underwriter and placement agent is United Overseas Bank Limited.
Food Empire is principally involved in the manufacture and sale of instant beverage products. The main product is coffee-based ready-mixed instant beverages in sachets (black coffee, coffee with creamer and cappuccino) while the other products include instant chocolate, tea-based products and coffee bags.
They are marketed under the Group's exclusive brands of "MacCoffee", "Temasek Royal", "Klassno", "Express", and "Fesbrew". These products are manufactured at the Group's three manufacturing plants located in Singapore, Johor Bahru and Penang which in 1999 accounted for nearly 76% of total production. The balance is done by contract manufacturers.
"In the early 1990s, we are one of the first to enter the Russian and Eastern Europe markets with the concept of instant beverages," said Mr Tan Wang Cheow, Managing Director of Food Empire Holdings Limited. "Food Empire has the first mover advantage of establishing our brands in these emerging markets with its huge populations. Today we have established strong brand equity and a wide distribution network that will support our plans to expand globally."
Food Empire has successfully established strong footholds in key markets in Russia, Eastern Europe, Central Asia and Indochina. It is one of the first few companies to introduce instant beverage concept in Russia where sales now accounts for nearly 64% of group turnover. Eastern Europe and Central Asia, the second major market, account for a quarter of the Group's sales. The Group's third major market is Indochina, namely Myanmar and Vietnam.
Food Empire Holdings now has representative offices in five countries and liaison arrangements in another four countries. Today, the Group's products are now sold in more than 30 countries.
Food Empire's business has grown significantly during the past five years. Turnover has increased from S$17.7 million for FY1995 to S$39.4 million for FY1999 while net earnings after tax have increased from S$723,000 in FY1995 to S$3.7 million for FY1999. Total assets have grown from S$4.7 million as at 31 December 1995 to S$27.5 million as at 31 December 1999.
As for future growth, Food Empire believes there are potential to develop its products further in both Russia and the Eastern Europe and Central Asia markets, given their big population base.
Recognizing the intense competition in the market for 3-in-1 instant coffee mix in these markets, the Group intends to adopt the following strategies:
