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Business

Lippo's Riady family to delist Singapore's Auric Pacific

Local bourse to suffer another loss

Auric Pacific's products include "Sunshine Bread" which is sold in supermarkets in Singapore.

SINGAPORE -- Singapore-listed food company Auric Pacific Group announced on Tuesday it has received a buyout offer from its owners, Indonesia's Riady family, to take the company private.

The offer is made by Silver Creek Capital, an investment holding company owned jointly by two members of Riady family -- Stephen Riady, the second son of Lippo Group Founder Mochtar Riady, and Stephen's son-in-law Andy Adhiwana. Together they own around 77% stake in Auric. Adhiwana is Auric's group chief executive, while Stephen is an executive director.

The offer, which values Auric at around 207 million Singapore dollars ($190 million), is priced at S$1.65 per share. Silver Creek does not own any shares in Auric currently but will pay around 48.3 million Singapore dollars for the remaining shares not already owned by Riady and Adhiwana.

The offer price is 13.4% higher than the closing price on Feb. 3 before trading was halted. Compared with the three-month average price, the offer price is 23.8% higher. Auric produces food products such as "Sunshine Bread" and also runs a number of food and beverage chains in the city-state, including the "Food Junction" food courts and the "Delifrance" cafes.

The two owners intend to delist Auric from the Singapore Exchange, according to the offer document. "As a non-listed entity, [Auric] will be able to achieve cost-savings by dispensing costs associated with complying with [SGX's] listing requirements ... as well as management's time and human resources committed for such compliance," said the document.

In a separate statement released by Auric on Tuesday, the company warned its shareholders that it was "exploring a possible impairment" for the financial year ended in December 2016, related to its Food Junction and Delifrance businesses.

Auric has been struggling to deliver good financial performance over the last several years, with its full-year net loss for 2015 amounting to S$40.8 million despite year-on-year growth in revenue, due to exceptional items booked for rationalizing its underperforming businesses. The company closed down its 16 Delifrance outlets in Malaysia in 2015.

The delisting of the company, if it occurs, will be another loss for the Singapore exchange that has seen a number of large-cap companies delisted in the last few years, including railway operator SMRT and the shipping line Neptune Orient Lines. The bourse has been struggling to attract initial public offerings amidst heated competition with other regional bourses including Hong Kong and Bangkok.

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