EKA to buy Kepala Batas Bihun as part of regularisation plan

PETALING JAYA: EKA Noodles Bhd, which lapsed into Practice Note 17 category last August, is looking to acquire the entire issued share capital in Penang-based rice vermicelli maker Kepala Batas Bihun Sdn Bhd (KBB), as part of its proposed regularisation plan.

In a filing with Bursa Malaysia, EKA Noodles announced that it had entered into a heads of agreement (HoA) yesterday with the vendors of KBB – Loo Seng Pang, Tai Poh Yak, Ang Eng Hooi, Phnuah Farn Farn, Ang Jin Mao and Datuk Seri Serm Juthamongkhon to set out the principal terms and conditions for the proposed acquisition of KBB’s entire issued share capital comprising 5.5 million ordinary shares or RM5.5mil.

According to EKA Noodles, the HoA was not exhaustive and was not intended to be legally binding between EKA Noodles and the vendors, except as specifically set out in the HoA.

“The proposed acquisition forms part of EKA Noodles’ proposed regularisation plan to regularise its financial condition, which entails among others, a proposed reduction in the existing share capital in EKA Noodles, a proposed debt-settlement scheme on the amount owed by EKA Noodles to the secured and unsecured creditors of EKA Noodles, and a proposed equity fund-raising exercise.

“The proposed acquisition is expected to complement the group’s existing business, which is principally engaged in the manufacturing and marketing of all types of rice and sago sticks (vermicelli),” according to EKA Noodles’ filings.

Meanwhile, under the terms of the HoA, both parties will mutually agree on the purchase consideration of the proposed acquisition before executing the transaction documents. The consideration is to be satisfied by the allotment and issue of new ordinary shares in the purchaser and/or any other means as the parties may mutually agree. EKA Noodles will also be entitled to carry out a due diligence, which covers all aspects, including KBB’s financial, commercial, legal and tax matters.