Agri-food business Japfa is reportedly considering delisting from the Singapore stock exchange and going private but has partially rebuffed the speculation.
Bloomberg reported last week that Japfa, which is headquartered in the city-state but with operations across Asia, has started talks with banks to obtain a loan to back its intentions.
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Discussions with ‘several banks’ and ‘at least one’ private credit fund have been held with a view to obtaining around $150m, Bloomberg cited unnamed sources familiar with the proceedings as saying.
A potential delisting is being mulled by Japfa, although no final decision has been made on the proposal, according to the sources, who asked not to be identified by the news agency.
In response to the Bloomberg article published on 8 March, Japfa posted a response on the Singapore Exchange today (11 March).
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“The company does not consider it appropriate to comment on the matters speculated in the article, which are not actions of the company or the board,” the statement read.
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By GlobalDataSigned off by Japfa CEO Tan Yong Nang, it added: “Nonetheless, the board wishes to inform shareholders of the company that it has been informed by Renaldo Santosa that his family, as key shareholders of Japfa Ltd., are aware of the article, and that from time to time, they are approached by various financiers, investment banks and other corporate finance professionals to consider a wide variety of transactions in the public debt and equity markets.
“As a matter of practice, the family typically assess all such proposals.
The statement continued: “As a result, the family are regularly engaged in exploratory discussions regarding various corporate actions, including ones both similar and different to what is currently being reported on.
“As there is no certainty or assurance that any definitive agreement will be entered into and/or that any transaction will materialise, shareholders and potential investors should exercise caution when dealing in the shares of the company and refrain from taking any action in respect of their investments which may be prejudicial to their interests.”
Japfa was loss-making in 2023, according to the company’s annual results issued in February. The poultry, beef and pork supplier delivered a PATMI loss (profit after tax and minority interests) of $30.8m, wider than a $6.5m loss a year earlier.
Operating profit was down 23.6% at $118.8m, while EBITDA dropped 11.5% to $237.9m.
Based on revenue of $4.4bn (up 1.5%), Japfa posted a loss after tax (PAT) of $6m, compared to a profit of $38.3m a year earlier.
“Profitability was affected by inflation, reducing consumer purchasing power and our ability to increase selling prices across all our markets,” Japfa said in the commentary.
“The world is currently facing a cost-of-living pressures. Global inflationary pressures arising from interest-rate hikes by central banks, high energy costs, supply chain bottlenecks and soaring production costs have put upward pressure on prices and ultimately affected consumer purchasing power.”
Japfa, which has operations in Indonesia, Vietnam, India, Myanmar and Bangladesh, added that the company “will hold back on non-essential capex across the group”.
“Growth plans” in Vietnam have also been “recalibrated”.
The business has a market capitalisation of $336m, according to the Japfa website.
