Executive chairman of SunMoon Food Gary Loh has told Fruitnet.com the listed Singaporean company remains on track to overcome its financial issues after two convertible loan agreements with Chic Foods fell through.
Last December, SunMoon, whose core business focuses on supplying fresh fruit and dehydrated produce from China, struck an investment deal with Chic Foods, a Shanghai-based company that exports Chinese-grown processed fruits.
Under the agreement, Chic Foods was set to provide a convertible loan of S$24m and an additional optional S$60m convertible loan facility. The funds were to be used to settle the outstanding principle on another convertible loan signed by the Singaporean company in March 2007. Chic, however, withdrew from both convertible loan agreements on 16 August.
Mr Loh, who is also currently SunMoon's largest shareholder, revealed to Fruitnet.com his personal view that the decision not to proceed with the partnership was reached mutually. From his perspective, the apparent benefits of the original agreement failed to eventuate and the cultures of the two companies were too different. “It was a case of the processed guys meet the fresh guys, but there was a different modus operandi,” he explained. “There were fewer synergies than first appeared and neither party could really see the ‘value-add’ that was on the table originally.”
Nevertheless, Mr Loh said SunMoon remained committed to its strategic goals, and confident of resolving the outstanding loan of S$24m owed to its bondholders. “The company is in talks with its current bondholders and we’re working towards a restructuring plan,” he told Fruitnet.com. “SunMoon's turnaround over the past couple of years means there should be good interest in the plan.”
As well as continuing with its core business of exporting fresh apples and pears and dehydrated produce lines from China, SunMoon has diversified its business in recent years. It has ventured into supplying complimentary products such as fresh fruit in cups, fruit chips and fruit juices as well as pursuing global sourcing of fresh fruits for marketing under the SunMoon brand in China and other parts of Asia.
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