Another Fu Yu ?
Consolidated before 10 into 3.
NAV $0.5722
Short at your own risks

 

The Group engages in the distribution and services solutions business, providing engineering and service solutions to customers in the semiconductor and electronics manufacturing industries. It designs and manufactures precision engineering solutions for automation in the electronics industry and distributes a wide range of manufacturing, testing and inspection/measurement equipment to the semiconductor, electronics manufacturing and telecommunication industries.The Group also engages in the vending solutions business primarily focusing on the distribution of intelligent vending machines to businesses in various industries such as food and beverage, leisure and hospitality

Ellipsiz BIX 0.00% , through its wholly-owned subsidiary, Ellipsiz Agro Investments Pte. Ltd. (EAIPL), has acquired an additional 40% stake in Ise Capital Management for $4.0 million on April 10.

 

The acquisition, which was completed on the same day, brings Ellipsiz&rsquo s stake in Ise Capital Maangement to 80%. The acquisition was done by way of a share transfer from Ise Hikonobu.

 

Hikonobu was the majority shareholder of Ise Capital Management. He was also chairman and honorary advisor of Ise Foods Inc., which is the top egg producer in Japan and the sixth largest egg producer in the world.

 

Following the acquisition, Hikonobu will now own a 13.3% stake in Ise Capital Management.

 

Ise Capital Management owns 70% of the issued and paid-up shares Ise Foods Holdings, a company that was incorporated in Singapore on Nov 6, 2020. Ise Food Holdings mainly produces and distributes fresh eggs as part of its business.

 

As at April 10, Ise Foods Holdings has an issued and paid-up share capital of $20.0 million comprising 20.0 million ordinary shares.

 

Vertex Ventures SEA Fund IV Pte. Ltd. and Vertex Exploratory Fund Pte. Ltd. hold the remaining 30% shares in Ise Foods Holdings in total.

 

According to Ellipsiz, the additional acquisition will provide it with an additional source of income, as well as enable it to broaden its operations and reduce its concentration of risks further in the semiconductor and electronics industry. In addition, the acquisition will allow Ellipsiz to &ldquo contribute positively&rdquo to Singapore&rsquo s &ldquo 30 by 30&rdquo food security goal.

 

Ise Foods Holdings, on Oct 25, 2022, received in-principle approval from the Singapore Food Agency (SFA) to construct a commercial egg farm. The farm will be Singapore&rsquo s fourth. It has a commercial egg farm, a day-old-chick (DOC) hatchery, a parent stock pullet farm, and a parent stock layer farm. The SFA was said to have carved out three plots of land with a total area of around 12.1 hectares to Ise Foods Holdings. The agency subsequently entered into a building agreement with Ise Foods Holdings.

 

In its statement, Ise Foods Holdings says it will apply for the farm and import licences from SFA to carry out the egg production business &ldquo at the appropriate time&rdquo .

 

Business operations of the farms are to commence in phases with the commercial egg farm to begin operations in 2024. The farms are expected to be fully operational by end 2026 with the capacity to produce no less than 360 million hen shell eggs per year.

 

For the eight months ended Feb 28, the Ise Capital Management group reported a net loss before income tax and non-controlling interests of $1.4 million. Based on Ellipsiz&rsquo s 80% interest in Ise Capital Management, the net loss attributable to the company was approximately $1.1 million.

 

If the acquisition had been completed on June 30, 2022, Ellipsiz&rsquo s net tangible assets (NTA) per share for the FY2022 would have been at 59.85 cents on a pro forma basis, up from its actual NTA per share of 59.64 cents.

 

However, on a pro forma basis, Ellipsiz&rsquo s earnings per share (EPS) for the FY2022 would have fallen to 1.15 cents from 1.55 cents as the farms have not commenced operations yet. The EPS is also computed after adjusting for Ise Capital Management group&rsquo s net loss.

 

ENGINEERING and service solutions firm Ellipsiz as well as members of the family that controls construction firm Lum Chang Holdings will offer to buy up remaining shares of the latter at S$0.38 apiece, while keeping it listed.

 

The mandatory conditional cash offer was triggered after Lum Chang managing director David Lum' s firm, Beverian Holdings Pte Ltd, purchased a 0.21 per cent stake in Lum Chang at the highest price of S$0.37 per share on the open market on Tuesday.

 

Besides the share acquisition, the low trading liquidity in the stock was another reason for the offer, according to the offeror' s announcement on Tuesday afternoon.

 

It added that Lum Chang shareholders will be able to realise their investments at a premium. The offer price is 8.6 per cent higher than Monday' s closing price of S$0.35. It is also at a premium of about 8.6-10.1 per cent over the volume-weighted average price per share for the one, three, six and 12-month periods up to Monday.

 

Beverian Holdings had a 19.17 per cent stake in Lum Chang through a nominee account as at Tuesday. Mr David Lum owns 99 per cent of Beverian Holdings while his son Kelvin Lum holds 1 per cent.

 

The offeror RMDV Investments is the bid vehicle for consortium members Ellipsiz, Mr David Lum and Raymond Lum, who is Lum Chang' s executive chairman. The two men each own a 45 per cent stake in the offeror, while Ellipsiz holds the other 10 per cent.

 

Mr David Lum and Raymond Lum are brothers and the controlling shareholders of Lum Chang, with a combined 42.65 per cent stake in the mainboard-listed construction and property development firm as at Tuesday.

 

Mr David Lum is also the sole legal and beneficial owner of another firm, Bevrian Pte Ltd, the controlling shareholder of Ellipsiz with a 60.28 per cent interest. He thus beneficially owns 60.28 per cent of Ellipsiz.

 

Meanwhile, Mr Kelvin Lum is Ellipsiz' s chief executive officer and executive director, as well as a non-independent non-executive director of Lum Chang. He sits on the board of the offeror alongside his father and uncle.

 

The offeror noted that the trading volume of Lum Chang' s shares " has been generally low" .

 

The average daily trading volume of the stock amounted to just 0.02 per cent of the total number of issued shares during the one-month period up to Monday, and ranged between 0.03 per cent and 0.06 per cent for the three, six and 12 months prior.

 

Ellipsiz, which does not own any Lum Chang shares, said its participation in the offer " is strategic in nature to generate better returns" by investing in Lum Chang shares for long-term investment purposes.

 

At the moment, RMDV intends to maintain Lum Chang' s listing status. If the latter' s free float falls below 10 per cent and the Singapore Exchange suspends trading, the offeror will act to lift the suspension.

 

The offeror may conduct a review of the business of Lum Chang and its subsidiaries after the offer closes.

 

RMDV plans to let Lum Chang continue with its existing activities, with no intention to introduce any major changes to the group' s business, redeploy its fixed assets or discontinue the employment of any existing employees other than in the ordinary course of business.

 

The consortium will fund the offer' s purchase price with financing from external sources, including loans and/or other credit facilities from banks and other credit-providing entities. RMDV has obtained an S$87.2 million secured loan from UOB, which may be used to fund the offer.

 

UOB is the financial adviser to the offeror for the offer. The bank confirmed that sufficient financial resources are available to RMDV to satisfy in full all acceptances of the offer.

 

Earlier this month, between Nov 5 and 11, Mr David Lum' s Beverian Holdings had also bought 744,600 shares of Lum Chang at S$0.35 apiece, increasing his total interest to 21.86 per cent at the time. This came after the acquisition of 73,000 shares at the same price on Oct 30.