announcement food empire holdings limited acquisitions of

ANNOUNCEMENT
FOOD EMPIRE HOLDINGS LIMITED
ACQUISITIONS OF:
1) 130,000 ORDINARY SHARES OF S$1.00 EACH IN FUTURE ENTERPRISES
(RUSSIA) PTE LTD (‘FER’) FROM SUDEEP NAIR (‘SUDEEP NAIR’); AND
2) 130,000 ORDINARY SHARES OF HK$1.00 EACH in FER (HK) LIMITED
(‘FEHK’) FROM BESTGATE INVESTMENTS LTD. (‘BESTGATE’);
(the ‘Acquisition’)
The Board of Directors of Food Empire Holdings Limited (the “Company”) is pleased to
announce that the Company has on 27 May 2005 entered into a sale and purchase
agreement (the "S&P Agreement") with Sudeep Nair and Bestgate (the ‘Vendors’), for
the acquisition of 130,000 ordinary shares of S$1.00 each in FER (the ‘FER Sale
Shares’) from Sudeep Nair and the acquisition of 130,000 ordinary shares of HK$1.00
each in FEHK (the ‘FEHK Sale Shares’) from Bestgate respectively (the FER Sale
Shares and the FEHK Sale Shares hereinafter collectively referred to as the ‘Sale
Shares’).
The Sale Shares shall be acquired free from all charges, liens and encumbrances and
with all rights attached thereto as at and from the date of completion of the Acquisition.
ABOUT FER and FEHK
FER is a private company limited by shares incorporated in Singapore on 12 October
2000, and has an authorised share capital of S$2,000,000 of which 1,000,000 ordinary
shares of par value S$1.00 each have been issued and fully paid up.
FEHK is a private company limited by shares incorporated in the Hong Kong Special
Administrative Region on 18 June 2004, and has an authorised share capital of
HK$5,000,000 of which 1,000,000 ordinary shares of par value HK$1.00 each have
been issued and fully paid up.
FER and FEHK carry on the business of marketing and distribution of the Group’s
products in Russia and some countries in the Commonwealth of Independent States.
THE PURCHASE CONSIDERATION
The consideration for the Sale Shares (the "Purchase Consideration") is S$8,636,000
(based on a closing price of S$0.34 on 27 May 2005) and was arrived at on a willingbuyer
willing-seller basis and after assessing the price earning ratio of the Company and
attributing this to the value of the Sale Shares with a discount factored into the total
amount. The Purchase Consideration will be satisfied by the issue and allotment of an
aggregate of 25,400,000 new ordinary shares of S$0.05 each in the capital of the
Company (the “Consideration Shares”), to be satisfied as follows:

(i)
(ii)
the issue and allotment of an aggregate of 25,028,571 Consideration Shares to
Bestgate;
the issue and allotment of an aggregate 371,429 Consideration Shares to
Sudeep Nair.
COMPLETION
Subject to the fulfillment (or waiver) of all the conditions precedent for Completion
set out in the S&P Agreement on or before the Completion Date (as defined below)
and there being no breach of any of the representations, warranties and
undertakings on the part of the Vendors under the S&P Agreement before the
Completion Date, Completion will take place on 30 June 2005 or such other date as
the Company and the Vendors may agree in writing (the ‘Completion Date’).
CONDITIONS PRECEDENT
Completion is conditional upon, inter alia, the following conditions being fulfilled:-
(a)
(b)
(c)
(d)
If necessary, the approval of the shareholders of the Company for the acquisition
of the Sale Shares and the approval of the issue of the FER Purchase
Consideration Shares and the FEHK Purchase Consideration Shares, in
accordance with the S&P Agreement;
If necessary, the approval by the SGX-ST for the acquisition of the Sale Shares
being obtained and not withdrawn, on or before Completion;
the approval by the SGX-ST for listing of and quotation for the FER Purchase
Consideration Shares and the FEHK Purchase Consideration Shares being
obtained and not having been revoked, as of the Completion Date; and
all representations, undertakings and warranties of the Vendors under this
Agreement being complied with are true, accurate and correct as at the
Completion Date in all material respects.
MORATORIUM
Pursuant to the S&P Agreement, the Vendors have agreed to the following moratorium
in respect of the Sale Shares. Sudeep and Bestgate separately undertake, not to sell,
transfer or create any interest in respect of:
(i)
(ii)
all of the FER Purchase Consideration Shares and FEHK Purchase
Consideration Shares for one year from the Completion Date;
more than 25% of the FER Purchase Consideration Shares and FEHK Purchase
Consideration Shares, for one year after but before two years from the
Completion Date; and

(iii)
more than 50% (on a cumulative basis) of the FER Purchase Consideration
Shares and FEHK Purchase Consideration Shares for two years after but before
three years from the Completion Date.
APPOINTMENT OF SUDEEP NAIR AS DIRECTOR
Under the S&P Agreement, on Completion, Sudeep Nair shall deliver to the
Company a duly executed copy of a service agreement to be entered into with the
Company (the ‘Service Agreement’) whereby Sudeep Nair will be appointed as an
executive director of the Company.
NET ASSET VALUE OF SALE SHARES
Based on the latest audited accounts of FER, the net asset value representing the FER
Sale Shares as at 31 December 2004 was approximately S$890,000.
Based on the latest unaudited accounts of FEHK, the net asset value representing the
FEHK Sale Shares as at 31 December 2004 was approximately S$330,000.
PROFITS OF SALE SHARES
Based on the latest audited accounts of FER, the net profits after income tax attributable
to the FER Sale Shares for the year ended 31 December 2004 was approximately
S$1,085,000.
Based on the latest unaudited accounts of FEHK, the net profits after income tax
attributable to the FEHK Sale Shares for the period between 18 June 2004 and 31
December 2004 was approximately S$303,000.
EFFECT ON NET TANGIBLE ASSETS
Assuming that the Acquisition had been completed on or before the beginning of the
financial year 31 December 2004, the restated net tangible asset per share of the Group
for the financial year ended 31 December 2004 would have decreased from 19.79 cents
to 18.90 cents (based on the enlarged capital of 374,540,000 shares).
EFFECT ON EARNINGS PER SHARE
Assuming that the Acquisition was completed at the beginning of the financial year
ended 31 December 2004, the basic earnings per share of the company for the said
period would have increased from 4.52 cents to 4.58 cents (based on the enlarged
capital of 372,923,000 shares).

RELATIVE FIGURES
The net asset value of the assets to be
disposed of, compared with the group’s net
asset value
The net profits attributable to the assets
acquired, compared with the group’s net
profits
The aggregate value of the consideration
given, compared with the issuer’s market
capitalisation
The number of equity securities issued by
the issuer as consideration for an
acquisition, compared with the number of
equity securities previously in issue
N.A.
8.8%
7.2%
7.2%
RATIONALE FOR TRANSACTION
In the opinion of the Company, the Acquisition allows the alignment of management
interests as part of the Group’s strategy to expand and grow its business.
INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS IN THE
ACQUISITION
None of the directors or substantial shareholders of the Company have any interests or
are deemed to be interested in the Acquisition.
DOCUMENTS FOR INSPECTION
Copies of the S&P Agreement are available for inspection at the registered office of the
Company at 10 Collyer Quay, #19-08 Ocean Building, Singapore 049315 during office
hours for 3 months after the date of this Announcement.
By Order of the Board
Tan Wang Cheow
Managing Director