The durian and health food distributor has been under judicial management since June 2022

 

NUTRYFARM International, which is under judicial management, has entered into a restructuring agreement with investor Corpbond IV to settle its creditors&rsquo claims, its judicial manager said in a bourse filing on Monday (Jul 15).

 

Nutryfarm, which manufactures and distributes nutrition and health food products, as well as durians, has been under judicial management since June 2022.

 

According to the terms of the restructuring agreement, both Nutryfarm and Corpbond have agreed to pay each creditor a lump sum payment of 20 per cent of their approved claim in cash, rounded up to the nearest dollar.

 

Corpbond will pay the cash consideration to each creditor, while each creditor shall assign, novate and/or otherwise transfer its claim in full and unconditionally to Corpbond. Following this, each creditor shall have no further claims against Nutryfarm.

 

The restructuring is conditional upon fulfilment and satisfaction of several condition precedents on or before the long-stop date or the extension date.

 

Among them are the judicial management order remaining in full force and effect, as well as court approval being obtained by the judicial manager or Nutryfarm, if required under applicable laws for Corpbond to make the payment of the cash consideration to each creditor.

 

If any condition precedents have not been fulfilled by the long-stop date or the extension date, the restructuring agreement will cease and determine, and no party shall have any claim against the other parties for costs, damages, compensation or otherwise.

 

In addition, the agreement may be terminated by Nutryfarm or Corpbond if any competent court has issued an injunction or order restraining or prohibiting the transactions contemplated under the agreement.

 

It can also be terminated by either party if there is any material breach of obligations or warranties on the part of Nutryfarm or Corpbond. Corpbond also has the right to terminate the agreement if there is any material breach of the creditors&rsquo obligations or warranties.

 

On the other hand, the restructuring agreement, other than the survival clauses, shall automatically terminate if the condition precedents have not been satisfied by the long-stop date or the extension date, whichever later, or if Nutryfarm is placed into liquidation.

 

In the event of the automatic termination of the restructuring agreement, none of the parties shall have a claim against the other for costs, damages, losses, compensation or otherwise.

 

Trading in Nutryfarm&rsquo s shares has been suspended since Apr 11, 2022. Its shares last traded at S$0.085 on Apr 4, 2022.

SEVEN former directors of Nutryfarm International : AZT 0% have been reprimanded by the Singapore Exchange Regulation (SGX RegCo) for failing to disclose material information in a timely manner, leading to declines in the company&rsquo s share price in 2021.

 

The seven are: Chang Meng, who was Nutryfarm&rsquo s executive director and chief executive Terence Luk, who was non-executive chairman Jimmy Ng and Neo Chee Beng, who were both non-executive and non-independent directors Lee Pih Peng and Eric Low, who were non-executive independent directors and Levin Lee, who was an executive director.

 

The public reprimand was in relation to Nutryfarm&rsquo s talks with its creditor, Corpbond IV, to potentially restructure HK$126.9 million (S$21.9 million) in third-party loans into convertible bonds. Converting the loans to equity would strengthen the company&rsquo s balance sheet.

 

On Jan 10, 2022, SGX issued a trading query after Nutryfarm&rsquo s shares fell 36.4 per cent to S$0.14 amid heavy trading. The company said at the time that it was not aware of any material information not previously announced to explain the unusual trading.

 

However, significant price movements a week later pushed Nutryfarm to call a trading halt on Jan 18. It later announced that the loans could be restructured into convertible bonds on Jan 20, 2022.

 

The former directors initially took the position that there was no new information to disclose, as they had already disclosed the possible loan restructuring in an announcement on Aug 3, 2021. However, SGX RegCo, in its assessment, argued that this announcement did not make any reference that there were ongoing negotiations to restructure the loans into convertible bonds.

 

If converted to equity, the convertible bonds would have a material dilutive effect on the respective shareholdings of existing shareholders. This meant the development was considered material information that required prompt disclosure in light of the unusual trading activity on Jan 10, 2022.

 

SGX RegCo also assessed that there was &ldquo no indication of any substantive checks&rdquo done to confirm if any leakage of information had occurred. The board earlier claimed that it had made arrangements to check with Corpbond IV on whether the unusual share trading was due to said leakage.

 

Nutryfarm, which distributes durian and health foods, requested for a trading suspension on Apr 11, 2022, pending a review of ongoing concerns, its shares last traded at S$0.085 on Apr 4, 2022.

 

THE High Court of Singapore has granted an application to place Nutryfarm International : AZT 0% under judicial management, announced the company in a bourse filing on Tuesday (Jun 28).

 

Chan Yee Hong of liquidator Nexia TS Risk Advisory has been appointed as the company&rsquo s judicial manager.

 

The application for judicial management was filed by Nutryfarm&rsquo s creditor, Corpbond IV Ltd, on May 10 this year following a spate of legal events regarding Nutryfarm&rsquo s loans owed to Corpbond.

 

Both parties were previously in talks to potentially restructure third-party loans that amounted to some HK$126.9 million (S$21.9 million) as at Jun 30, 2021. The loans were then set to expire between March and November 2022.

 

In a Jan 20 response to Singapore Exchange queries this year, Nutryfarm said it had yet to reach any definitive agreement with Corpbond on a restructuring.

 

Its board also disclosed that pre-action discovery proceedings were commenced against the company on Dec 14, 2021, by an individual claiming to have provided funding for some loans that were later novated to Corpbond.

 

Separately, Corpbond further issued letters of demand to Nutryfarm&rsquo s subsidiary LottVision and its corporate secretarial services provider, for the group to pay outstanding sums of S$3.9 million and US$271,849 that were due on Mar 31 this year. 

 

This money was part of the principal amount of a loan, as well as the interests accrued, that Nutryfarm took from Corpbond and Furong Investments in 2017.

Nutryfarm&rsquo s subsidiary Global Agricapital Thailand (GAT) had entered into 2 settlement agreements amounting to a total of 33.4 million yuan in relation to shortfall of durians delivered. AFP FILE PHOTO

NUTRYFARM International clarified on Sunday (May 29) that it holds its former chief executive officer Cheng Meng personally responsible for 2 settlement agreements relating to a shortfall in delivery of durians.

 

The company issued the clarification in relation to an article by The Business Times on the 2 settlement agreements published on May 27. Nutryfarm&rsquo s subsidiary Global Agricapital Thailand (GAT) had entered into 2 settlement agreements amounting to a total of 33.4 million yuan (S$6.8 milion) in relation to a shortfall of durians delivered.

 

&ldquo The company holds Cheng Meng personally responsible for the settlement agreements, including the compensation and penalty amounts therein, all economic and financial losses suffered and that will be suffered by the company and the group, and any fiduciary and regulatory breaches as a result of his actions,&rdquo Nutryfarm said.

 

Nutryfarm said there were no commitments or requirements on minimum quantity and/or delivery by GAT and there are no compensation clauses in the durian purchase agreements known to the company.

 

The company added that the settlement agreements and terms, including compensation, were entered into by its former chief executive without the knowledge of the company. It said the 2 settlement agreements were dated Jan 27 and 28 of this year, but were only made known to the company on May 23.

 

&ldquo The company is currently contemplating making reports to the relevant authorities in the relevant countries and taking legal actions against Cheng Meng,&rdquo it added.

 

Shares of Nutryfarm have been voluntarily suspended since April this year.

NUTRYFARM International requested a trading suspension on the Singapore Exchange (SGX) before the market opened on Monday (Apr 11), pending a review of ongoing concerns.

 

Shares of the mainboard-listed durian and health foods distributor last closed flat at S$0.085 on Apr 4.

 

It requested 2 trading halts last week.

 

The first one on Apr 5 was over an announcement that its subsidiary LottVision and its corporate secretarial services provider Lee & Lee had been issued letters of demand from its creditor Corpbond IV for NutryFarm to pay an outstanding sum of S$3.9 million and US$271,849 that were due on Mar 31 this year.

 

This money is part of the principal amount of a loan, as well as the interests accrued, that NutryFarm took from Corpbond IV and Furong Investments on Oct 30, 2017.

 

The letter of demand to LottVision, which was issued on Apr 1, stated that Corpbond IV will take legal action against the company if it fails to pay the money it owes within 10 days from the date when the letter was issued.

 

As for the letter to Lee & Lee, it stated that CorpBond IV will declare the total debt amount to be immediately due if the outstanding amount is not paid within 5 days from when the letter was issued.

 

Nutryfarm had said in the bourse filing then that it will be seeking legal advice on the issue and will take appropriate action.

 

After requesting to lift the trading halt after the market closed on Apr 5, the company requested another halt the next day, pending confirmation on ongoing concerns from SGX queries.

 

NutryFarm was recently questioned over the appointment of its executive chairman Wu Yongqiang, who took on the role since Mar 8.

 

Wu has been a substantial shareholder of NutryFarm since Jun 30, 2021, and he owns a 13.97 per cent stake in the durian and health foods distributor as at Mar 9, 2022.

 

SGX queried NutryFarm over the suitability of Wu as a board director given his many ongoing lawsuits in China.

 

NutryFarm responded on Mar 14 that it is satisfied with Wu' s character and integrity for him to be appointed as the company' s new executive chairman, even though he is involved in 18 civil suits in China, as they have assessed that these cases are commercial in nature.

 

It added that the company' s nominating committee has reviewed each of the civil suits, along with an opinion report from Guangdong Guanghe law firm, and has assessed that they do not involve fraud, dishonesty, misrepresentation, misconduct or mismanagement on the part of Wu.

 

NutryFarm also said there is no potential conflict of interest between its business and KTL Global, a fresh vegetable and fruit distributor of which Wu is serving on its board as a non-executive chairman.

 

In another response to further queries from SGX on the potential conflict of interest that could arise given Wu' s position in both companies, NutryFarm said in a bourse filing on Mar 25 that it intends to appoint more independent directors and retire existing ones.

 

It added that any transactions with KTL Global and its subsidiary Tianci Agritech will also be approved by the board and reviewed by the audit committee. Wu will abstain from voting on any matters relating to KTL Global and Tianci Agritech, noted NutryFarm.