JB Foods Limited passes on acquisition of cocoa facilities

Citing "challenging" business environment as cause.

JB Foods Limited previously disclosed that the net proceeds from its recent Subscription will be used to fund future acquisition and expansion plans, as well as general working capital of the Company.

The Group had been granted two call options to acquire equity interests in overseas cocoa processing facilities in Indonesia and Germany.

"However, as previously highlighted in the Group’s first quarter results announcement, the business environment has continued to be challenging as a result of the unusual cocoa market consolidation. While the Audit Committee of the Company will continue to evaluate the feasibility and benefit of exercising the two Call Options, there is currently no immediate intention to exercise the call options," said the company in a release.

"As such, the Company wishes to announce that it has reallocated all the unutilized proceeds from the Subscription originally allocated for future acquisition and expansion plans to fund the Company’s general working capital instead. The Board has considered the impact of the change in the use of proceeds on the Group’s business and is of the view that the Reallocation will meet the financial needs of the Group more efficiently," it added.

"The Board believes that such flexibility in financial management is in the best interest of the Company and its shareholders as a whole. Upon completion of the Reallocation, the Company intends to use its internal resources or look to alternative finance options to fund any future acquisition and expansionplans as and when they arise," it said further.