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Wed 28 Nov 2018 – 5:50
Singapore
BARELY, a week after Kimly Limited sought to stop trading its shares pending an announcement, Singapore's largest traditional coffee operator has voluntarily suspended its talks on Tuesday amid speculation over shortcomings of disclosure.
The company, which operates and operates a network of outlets and food establishments in central Singapore, said the latest suspension is due to pending issues that need to be communicated to shareholders.
These include regulatory orders for the provision of certain information and documents, updates on a recent acquisition and unaudited group results for the year ended September 30.
Market watchers suspect this could be related to the directors' disclosure of the company's purchase of Asian Story Corporation (ASC), a manufacturer and seller of Asian-flavored beverages such as chrysanthemum, watermelon winter, horse chestnut and lychee.
On July 2, Kimly completed the acquisition of ASC from Wang Chia Ye for $ 16 million in cash. The transaction provided that Mr. Wang would obtain a "price supplement", based on the pre-tax income earned by the company during that calendar year. If the pre-tax profit exceeds S $ 2 million, he will be entitled to an additional S $ 8 million; If it is less than 2 million Singaporean dollars, the price supplement will be prorated.
The relationship between ASC and the beverage group, Pokka, has sparked curiosity. Alain Ong (aka Ong Eng Sing), a former non-executive and non-independent director of Kimly, was until recently the former chief executive officer of Pokka International. He stepped down as Kimly's director in January of this year after the annual general meeting.
Then, in late September, the Chinese media announced that he was about to join Kimly. Kimly declined to comment on "information or information from third-party sources".
An analyst said: "I do not think that the group's financial figures contain any errors.I hope not.I guess that there is a disclosure gap in the purchase of Asian Story , probably involving the interest of the director. "
The analyst added: "Asian Story generates profits and will affect Kimly's results for fiscal year 2012".
Founded in 1990 by its executive chairman Lim Hee Liat and several of his friends, Kimly was listed on the Catalist Exchange of Singapore Exchange Securities Trading on March 20, 2017. Of the 173.8 million new shares offered at 25 Singapore cents each, 170 million were private shares. placed, leaving 3.8 million for public subscription.
After the initial public offering (IPO), the controlling shareholder, Mr Lim, held 42.4% of Kimly; his brother Peter Lim owns 0.05%.
The Company has allocated $ 33.4 million of the net proceeds from the IPO to finance the estimated total expenditures related to acquisitions, joint ventures, general business expansion (including the creation of new food outlets) and the renovation of existing outlets.
The IPO was sponsored by PrimePartners Corporate Finance. Contacted at the time of the suspension, PrimePartners' Joseph Au declined to comment.
Since the IPO reached 55 cents Singapore, Kimly's shares slid around 28 cents Singapore at the time of the suspension. At 28 cents Singapore, the shares were trading at a multiple of 14 times the estimated earnings for the 2008 financial year.
Another analyst said the group enjoyed a proven track record as an operator of food outlets.
"It's a positive cash flow." Coupled with IPO funds, its track record is pretty rich. "
For the third quarter ended June 30, Kimly announced a 5.8 percent decline in net income to S $ 5 million, while its revenue increased 4.2 percent to $ 49.9 million. Singapore dollars.
The group's financial position was solid, with total cash and bank balances rising to 84 million Singapore dollars at the end of June 2018.
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