Japfa to list AustAsia subsidiary on SEHK

Unlocking its shareholder value could lead to Japfa's equity value re-rating.

SGX-listed animal protein company Japfa announced the submission of an application to the Stock Exchange of Hong Kong (SEHK) to list its subsidiary, AustAsia Investment Holdings (AIH).

It also proposed a distribution in specie (DIS) of its entire shareholding in AIH to shareholders by way of a proposed capital reduction exercise.

The proposed distribution will create two distinct businesses: Japfa Animal Protein in Indonesia, Vietnam, India, Myanmar, and Bangladesh; and AIH dairy in China. These businesses would allow each entity's board and management to concentrate on their respective core business and strategies and provide operational flexibility to execute their business plans.

It would also provide flexibility for Japfa's shareholders to deal with the AIH shares without Japfa Shares and any additional cash outlay, giving them the discretion to decide on their holdings in Japfa and AIH while having the option to participate in the growth of both entities.

"The separation of AIH and Japfa Animal Protein is a watershed moment for the group and enables a clearer and focused approach to driving growth in both entities. Japfa Animal Protein has emerged stronger from the COVID-19 down-cycle and played an important role in providing food security and minimising disruption to the supply chain in the countries where it operates. We are confident Japfa Animal Protein is well-positioned in shaping the animal protein industry with a multi-year runway to take advantage of the growth opportunities in these countries," said Japfa executive director and CEO Tan Yong nang in a bourse disclosure.