SINGAPORE (Jan 30): Lim Wee Li, executive chairman and CEO of Kitchen Culture Holdings, has sold a chunk of shares equivalent to more than half of the company.
With the sale, Lim (picture from company's 2018 annual report) is left with just under 26.2 million shares, equivalent to 21.73% of the company.
Kitchen Culture specialises in selling kitchen furnishings and appliances. Prior to the sale, Lim held nearly 93.2 million shares, or 77.34%.
The sale was made by a broker via an off-market deal. The transacted price wasn’t disclosed.
“Following the shares sale, Lim Wee Li remains as the executive chairman and CEO of the company, and will continue to oversee the sales, marketing and business development of the group,” states the company in an SGX filing on Jan 30.
“The shares sale is not expected to result in a change in the management of the Group for the foreseeable future,” the company adds.
Besides Lim, his brother, Lim Han Li, sold his shares as well. Han Li used to hold 8,250,000 shares, which made him the second largest shareholder. He sold half that tranche, leaving him with 4.125 million shares, equivalent to a stake of 3.42%.
In the same announcement, Kitchen Culture says that “to the best knowledge” of the board, one Chee Tuck Hong has bought 20 million shares, equivalent to 16.6% of the company as of Jan 30.
Based on what the company announced, 71.125 million shares were sold by the Lee brothers.
Kitchen Culture has been struggling in recent years. For the financial year ended June 30 2019, the company reported revenue of $10.5 million down 26.7% from $14.4 million recorded in the preceding year.
Losses in FY2019 narrowed slightly to $3.69 million, from just over $4 million suffered in FY2018.
The company carries a significant debt load. As at June 30 2019, it had a negative working capital position and a net liability position of $5.4 million and $4.9 million respectively.
To address worries that the company is a going concern, Lim had given an interest-free loan of $2.1 million. Other creditors holding a total of $2.6 million due had also agreed not to demand repayment for 12 months.
Back in Oct 2016, Kitchen Culture made news for trying to borrow from a crowdfunding platform FundedHere.
Typically, crowdfunding platforms are where start-ups and privately-held SMEs raise funds, but not listed companies.
“Based on current market conditions, the Company believes that the Bond Issue is presently a more viable option to raise funds for the Company compared to current funding options that are reasonably available from traditional lenders such as banks and financial institutions,” said Kitchen Culture back then.
Kitchen Culture had wanted to raise a $2 million bond at 9% interest. In May 2017, the company said it managed to raise just $750,000.
On Jan 30 2020, shares of Kitchen Culture jumped 9.23% to close at 7.1 cents, valuing the company at $8.55 million.