THAIFOODS GROUP PUBLIC COMPANY LIMITED

Transcription

1 THAIFOODS GROUP PUBLIC COMPANY LIMITED No Shinawatra Tower III, Fl 11th & 12th, Vibhavadi-Rangsit Rd., Kwaeng Chatuchak, Khet Chatuchak, Bangkok 10900, Tel : (+66) Fax : (+66) Registration No Ref: TFG/IR-SET December 2016 Subject : Notification of Approval Investment in Big Food Group Co., Ltd. (Revised) Attention : President The Stock Exchange of Thailand According to Thaifoods Group Public Company Limited ( the Company ) informed approval investment viability study in Big Food Group Co.,Ltd. ( Big Food ) that the Board of Director Meeting No. 6/2559, dated 30 September The Company would like to additional inform you that the Board of Director Meeting No. 8/2559, dated 23 December 2016 has approve the Company s investment in Big Food Group Co., Ltd. which operated broiler chicken and slaughter house by acquiring the existing shares from Big Food s existing shareholders in amount of 100,016 shares and the newly issued shares of Big Food in amount of 200,000 shares, the total amount of 300,016 shares in the consideration paid of Baht 200 per share (at the par value of Baht 100 each) or equivalent total value not exceeding 60,003,200 Baht. The Company will hold percent of Big Food s registered capital (after Big Food s capital increase). Such investment is considered as an entry into the assets acquisition transaction of listed company under the Capital Market Supervisory Board No. Tor Jor. 20/2551 regarding Rules for Entering into Substantial Transactions within the Definition of an Acquisition or Disposal of Assets dated 31 August 2008 and its amendments and the Notification of the Board of Governors of the Stock Exchange of Thailand regarding Disclosure and Compliance by Listed Companies relating to Acquisition or Disposal of Assets B.E dated 29 October 2547 (Acquisition and Disposition Rules). The highest value of transaction size obtained from the total consideration criteria (which is the criteria that was used to obtain the maximum value of the transaction) equals to 0.40 percent. If the assets acquisition transactions in the past 6 months before the date that transaction is entered into are taken into account, the size of the transaction equals to percent of the Company s total assets. The transaction is considered insignificant according to the Notification on Acquisition or Disposition of Assets and is not considered as connected transaction.

2 The details of the investment in Big Food by acquiring its existing shares and newly issued shares are as follows: 1. Date Month Year of Transaction The Company will invest in Big Food by acquiring its existing shares and newly issued shares after the Company obtains the approval from the Board of Directors Meeting No. 8/2016. It is expected to complete this transaction within the month of January Relevant Parties and Relationship with Listed Company Purchaser : Thaifoods Group Public Company Limited Seller : 1. Mr. Phongsak Chinsoranan Mrs. Narumol Joothasorn Mr. Thawatchai Panyasarn ( Existing shareholders of Big Food ) 2. Big Food Group Company Limited Relationship : Each seller is not considered as connected transaction or any relationship with the company 3. Nature of Transaction and Details of Acquired Assets Currently, Big Food s Existing Shareholders holds 200,000 shares in Big Food with the par value of Baht 100 each, totalling 100 percent of the total shares in Big Food. The number of 200,000 shares or 20,000,000 Baht has been fully paid up The Board of Directors Meeting No. 8/2016 of the Company which held on 23 December 2016 approved the Company s investment in Big Food by acquiring its existing shares and newly issued shares as per the following details: 1. to acquire 100,016 existing shares in the consideration paid of Baht 200 per share, being percent of Big Food s registered capital of Baht 20,000,000 (before capital increase from Big Food s Existing Shareholders) as per the following details: Seller No. of Shares (Shares) Amounts (Baht) 1. Mr. Phongsak Chinsoranan 33,350 6,670, Mrs. Narumol Joothasorn 33,333 6,666, Mr. Thawatchai Panyasarn 33,333 6,666,600 Totals 100,016 20,003, to subscribe in the newly issued shares of Big Food in amount of 200,000 shares at Baht 200 per share, the total amount is Baht 40,000,000, being percent of Big Food s registered capital after increase capital Therefore, in this transaction, The Company will acquired shares from existing shareholders and subscribe in the newly issued shares of the Big Food, the total amount is Baht 60,003,200

3 Shareholding percentage after the company investment in Big Food will be as follows: 1. The existing shareholders will hold approximately percent of Big Food s registered capital; 2. The Company will hold approximately percent of Big Food s registered capital; Names and shareholding percentage before acquisition of shares and after capital increase No. Name of Shareholders Before Share Offering Number of Shares (Share) Percentage (%) After Share Offering (Existing Shares and New Shares) Number of Percentage Shares (%) (Share) 1. Mr. Phongsak Chinsoranan 66, , Mrs. Narumol Joothasorn 66, , Mr. Thawatchai Panyasarn 66, , Total Amount Before Share Offering 200, , Thaifoods Group Pcl , Total Amount After Share Offering , Note: In doing such joint venture, the Company and Big Food s existing shareholders will enter into the shareholders agreement to determine the terms and conditions for managing and operating Big Food s business. The Company and Big Food s existing shareholders will jointly manage and administer Big Food and no party has control over one another. Preliminary Details of Big Food Group Co., Ltd. Name of Business : Big Food Group Co., Ltd. Nature of Business : Live chick and chick processing (slaughter parts) Capital Structure : As at 31 December 2016, Big Food has the registered capital of Baht 20 million, divided into 200,000 shares, at the par value of Baht 100 each. The total registered shares was fully paid up Board of Directors : As at 30 June 2016, there were 3 directors as follows: 1. Mr. Phongsak Chinsoranan 2. Mrs. Narumol Joothasorn 3. Mr. Thawatchai Panyasarn After investment in Big Food, 5 new directors will be appointed and the total directors will be 8 persons. The Company will delegate 5 representatives to be Big Food s directors.

4 : Financial Information (Baht) As at 31 December 2015 Cash and Bank Deposit 3,250, Total Current Assets 7,293, Total Non Current Assets 146,420, Total Assets 153,714, Total current Liabilities 87,572, Total Non Liabilities 68,213, Total Liabilities 155,786, Issued and Paid Up Capital 20,000, Total Shareholders Equity (2,072,150.31) Total income 1,001,636, Profit/(Loss) before interest and tax (13,528,378.63) Net Profit/(Loss) (18,566,985.65) Big Food was set up on 25 July 2014 to engage in the poultry business, Including live chick and chick processing (slaughter parts). Big Food has a slaughter house located in Ratchaburi province with the current capacity of 40,000 chicks per day and also can improve the capacity to 80,000 chicks per day. In addition, Big Food has 4 hatcheries and contract farming with 118 farms. Calculation Criteria The transaction is not considered as connected transaction and the highest value of transaction size obtained from the total consideration criteria (which is the criteria that was used to obtain the maximum value of the transaction) equals to 0.40 percent based on consolidated financial statement of the company as at 30 September 2016 as per the following details : 1. Net Assets Criteria Unable to calculate due to the fact that Big Food has negative NTA 2. Profit Criteria Unable to calculate due to the fact that Big Food incurs loss from its operation 3. Total Consideration Criteria Total Value of Consideration : 60,003,200 Baht Total Assets of the Company 15,095,771,000 Baht (as per the reviewed consolidated financial statements ended as at 30 September 2016) Transaction size : 0.40% 4. Securities Value Criteria -Unable to calculate due to no issuing of securities as consideration for assets-

5 The highest value of transaction size obtained from the total consideration criteria (which is the criteria that was used to obtain the maximum value of the transaction) equals to 0.40 percent. If the assets acquisition transactions in the past 6 months before the date that transaction is entered into are taken into account, the size of the transaction equals to percent of the Company s total assets. As a result, the size of such transaction is less than 15 percent of the Company s total assets. The size of such transaction is not then considered as material transaction which requires disclosure under the Acquisition and Disposition Rules. 4. Total Value of Consideration The Company will be paid for the existing shares and newly issued shares in Big Food in the total amount of Baht 60,003,200, which is divided and payable as follows: (1) Baht 20,003,200 for the existing shares to Big Food s Existing Shareholders; (2) Baht 40,000,000 for the newly issued share to Big Food; 5. Value of Acquired Assets The total amounts of 300,016 shares, being percent of Big Food s registered capital of Baht 40,000,000 with the approximate value of Baht 60,003, Criteria Used in Determining Purchase Price of Shares It is determined by the financial projection for the investment in Big Food according to discounted cash flow method is equal to Baht 556/ share, Net Present Value (NPV) and Payback period taking into account the return of such investment. The NPV is equal to Baht 190 Million and Payback period is approximately 3.85 year. 7. Expected Benefit In order to comply with the policy in expanding poultry business in domestic and encourage the company to expand distribution channel of chick supply and feeds supply. 8. Source of Fund for Transaction The source of fund for this transaction is derived from the Company s cash flow, which will not adversely affect the Company s liquidity and operation. 9. Opinion of Board of Directors Reference is made to the Board of Directors Meeting No. 8/2016 of Thaifoods Group Public Company Limited which held on 23 December The entry into this transaction is in line with the Company s investment policy. Big Food Group Company Limited is engage in poultry business consist of live chick and chick processing (Slaughter parts) with the maximum capacity of 80,000 chicks per day. The total amount of this investment is Baht 60,003,200. The Board of directors is determined that the return is reasonable by the financial projection for the investment in Big Food according to discounted cash flow method, Net Present Value (NPV) and Payback period. The Board is expected that

6 such investment will enhance the Company s income and result in good investment return in the future. In the long term, the shareholders will also receive benefit from such return. 10. Opinion of Audit Committee Which Differs from Board of Directors -None- The Company certifies that this information memorandum is true and accurate in all respects. It has been prepared with prudence and due care taking account the shareholders best interest. This information memorandum is made for the purpose of demonstrating relevant information only. It is not meant to be an invitation or offer to acquire for securities. Thaifoods Group Public Company Limited Mr. Chirdsak Kukiattinun Chief Operations Officer