KUALA LUMPUR (Dec 4): HB Global Ltd’s proposed acquisition of frozen meat and poultry products trader KK Fresh Frozen Sdn Bhd for RM30 million has collapsed, as the specified conditions precedent within the conditional period were not fulfilled.

HB Global, a company engaged in the trading of frozen meat and poultry products, announced on Monday, the automatic termination of the share sales agreement (SSA) related to the proposed acquisition, citing non-fulfilment of the conditions precedent within the conditional period.

Additionally, HB Global said it received notification from the vendor, KK Fresh’s managing director Tan Hwa Sin, indicating no intention to extend the conditional period.

On April 6, 2023, HB Global entered into an SSA with Tan, to facilitate the acquisition of KK Fresh.

Under the terms, HB Global was set to issue 200 million shares at an issue price of 15 sen each to Tan, making Tan a substantial shareholder in HB Global with a 20.5% equity interest, based on an enlarged share capital of 977.71 million shares.

According to the SSA, Tan provided a profit guarantee, stating that KK Fresh would achieve a minimum profit after tax (PAT) of RM3 million for the financial year ending Dec 31, 2023 (first profit guarantee period) and RM3.50 million for the one ending Dec 31, 2024 (second profit guarantee period).

Following the termination of the SSA, HB Global will submit an application to Bursa Securities for the withdrawal of the additional listing application for new shares intended for issuance pursuant to the proposed acquisition. This application was submitted to Bursa Securities for approval on June 2, 2023.

It should be noted that in July 2020, another listed company, Saudee Group Bhd, also proposed to acquire KK Fresh from Tan, with a price tag of RM9.4 million at the time, to be satisfied via the issuance of 31.25 million Saudee Group shares. The deal however, fell through in September 2020, after the agreement to execute the deal lapsed.

Shares of HB Global settled unchanged at 10 sen on Monday, giving the group a market capitalisation of RM78.38 million.

Read also:
HB Global buys poultry firm for RM30 mil via new share issuance