Temasek in talks to sell $321m SFI stake

Move aimed to unlock shareholder value and optimise returns, says Singapore investment company

TEMASEK Holdings’ wholly owned subsidiary, Ambrosia Investments, is in talks to sell its majority stake in Singapore Food Industries (SFI).

Singapore investment company Temasek owns 69.87 per cent of SFI, according to Bloomberg data.

Temasek’s total stake is valued at about $321 million, based on SFI’s current market value of about $460 million.

Ambrosia had told SFI in late October that it was evaluating its option with its SFI stake.

SFI said in an update yesterday: ‘The board has been informed by the company’s majority shareholder Ambrosia Investments that discussions are presently ongoing between the majority shareholder and a potential acquirer with respect to the majority shareholder’s stake in the company.’

The board cannot assure that any transaction would materialise, SFI said. No other details were provided.

Temasek’s managing director of investments, David Heng, said Temasek reviews its portfolio regularly as an ‘active investor’ and is exploring its options on SFI with the aim of ‘unlocking shareholder value and optimising returns’.

The SFI announcement comes after Temasek halted the sale of PowerSeraya last week, citing market conditions. In an earlier report, BT quoted sources as saying that lower-than-expected bids could be one reason prompting Temasek to call off the genco sale.

SFI is an integrated food group. Besides Singapore, it has established a presence in the UK, and also has operations in Ireland, China and Australia.

The group reported a 4.9 per cent year-on-year rise in net profit to $5.78 million for the three months ended September 2008. This was despite a 2.4 per cent slip in sales to $158 million.

SFI has $17.4 million in cash and cash equivalents as at Sept 30, down from $21 million a year ago.

Shares of SFI fell as much as 5 per cent yesterday and ended down 1.7 per cent at 89 cents. The stock has risen 9.2 per cent since Oct 23, when SFI said Ambrosia was evaluating its SFI stake. It hit a year-high of 97.5 cents on Nov 7.

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