Food Empire Holdings (FEH), a Singapore-based food and beverage company, has announced a second supplemental agreement with Ikhlas Capital to address its redeemable exchange note (REN). The agreement, revealed on 1 July 2025, seeks to mitigate potential revaluation losses or gains by adopting a “fixed-for-fixed” accounting classification. This move is intended to reflect the company’s true earnings power and eliminate non-cash impacts on reported earnings due to fair value changes.
The agreement includes the appointment of RHT Capital as an independent financial adviser, which has confirmed that the amendments do not advantage REN holders. Additionally, the definition of a “company liquidity event” has been clarified, requiring acceptance and approval by FEH for any proposed bona fide offer. Constraints on dividend payments and share issuance below the exchange price will be addressed through cash compensation to REN holders.
FEH is also conducting an independent valuation to reassess financial liabilities and fair value changes from the start of the financial year. A potential fair value loss, estimated at approximately $20m (£15.5m), may be recognised in the first half of 2025 due to a significant increase in FEH’s share price. However, this loss is non-cash and will not affect the company’s cash flow or actual earnings power.
The company is considering a bonus issue for the financial year 2025, given the last such issue was in 2008 and coincides with Singapore’s 60th independence anniversary. Analysts see potential share price weakness as an opportunity to invest in FEH, with a target price of S$2.28 ($1.67) based on a projected earnings growth rate of 10.3% from 2024 to 2027.
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