Kitchen Culture

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Jul 22, 2011
Upmarket kitchen appliance retailer goes to market

By Daniel Ho

THE newest listing on the Singapore Exchange's second board - a local firm selling upmarket kitchen appliances here and in Malaysia - makes its debut today.

Most of Kitchen Culture's business involves fitting out new projects for property developers.

The firm offered 17 million new shares, at 30 cents a share, by way of placement in its initial public offering (IPO), for a Catalist listing, which closed yesterday.

All 17 million shares were placed out. There was no public tranche of shares on offer.

The share offering represents about 17 per cent of Kitchen Culture's enlarged issued share capital after the IPO.

The firm said it hopes to raise about $3.72 million in net proceeds, which would be used to fund business expansion and for general working purposes.

Mr Lim Wee Li, chief executive and executive chairman of Kitchen Culture, told The Straits Times: 'The listing will raise our standing in the international arena, enable us to build on our success and also ride the growth momentum of both local and regional property markets.'

Kitchen Culture specialises in the sale and distribution of a wide range of premium imported high-end kitchen systems, kitchen appliances and household furniture from Europe and the United States.

The group distributes more than 10 brands in the residential kitchen industry, including Poggenpohl of Germany and Sub-Zero of the US.

While Kitchen Culture does engage in distribution and retail sales, 76 per cent of its revenue is derived from projects with property developers to outfit their residential properties.

Mr Lim was optimistic about the firm's outlook, citing strong demand from property developers.

'Given the trend among property developers to build more luxurious residences, we foresee strong demand from these developers for our products,' he said.

'We hope to expand geographically and also in terms of our product range,' he added.

He highlighted the group's plans to enter new markets such as Hong Kong and Indonesia within the next two years.

'We will leverage our proven track record in Singapore and also capitalise on our competitive edge as a multi-brand company.'

Mr George Lim, executive director at Kitchen Culture, said that the group intends to reward shareholders by recommending a dividend payout of at least 20 per cent of net profits for the 2011 and 2012 financial years.

The firm said net profits more than trebled to $4.3 million in the year ended Dec 31, last year, compared to a year earlier. Trading starts today.
My Value Investing Blog:
nice. kitchen appliance is cool.
Dividend Investing and More @
Another one comes onboard to cash out..
If I'm not mistaken. this is the second listed company turn to crowdfunding platform for financing ?
9% coupon rate per annum, who is interested ?

Bond Issue through Crowdfunding Platform
Kitchen Culture Holdings Ltd. wishes to announce that the Company has, on 27 October 2016, entered into a term sheet (the “Term Sheet”) that is intended to be legally binding with a crowdfunding platform, to issue non-convertible bonds (the “Bond Issue”) for a sum of S$2.0 million (the “Loan”).

The crowdfunding platform is a company licensed by the Monetary Authority of Singapore and supported by a group of Singaporean investors. It is based in Singapore and is an equity and lending-based crowdfunding platform.

The tenure for the Loan is 24 months where 50% of the principal is due for repayment in 12 months and the remaining 50% at the end of the next 12 months. The Company has the option to repay the full sum either (i) during the first 12 months provided that all coupons that would have accrued during the 12-month period are due immediately on full redemption; or (ii) at the end of the first 12 months without incurring any penalty.

The Company also retains the right to repay the remaining 50% of the principal in full during the final 12 months provided that all coupons that would have accrued during the final 12-month period are due immediately on redemption of the bond regardless of when the principal is paid.

Coupon Rate
The Coupon Rate is 9.0% per annum (the “Coupon Rate”) which will be paid out quarterly on the last day of the month. In the case of late payment, interest will increase to 12% per annum for the period payments are behind schedule, calculated on a per day basis, and added to the quarterly interest payment for the period immediately following the late payment period.

Administration Fee
The crowdfunding platform charges an administration fee of 2.25% of the Loan amount, payable upon the disbursement of the Loan.

Mr Lim Wee Li, being the Executive Chairman and Chief Executive Officer of the Company as well as the controlling shareholder of the Company, will have to pledge 50,000,000 ordinary shares, representing a 50% equity stake in the Company held by him, to the Trustee as security.

Rationale for the Bond Issue
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.

Use of Proceeds
The full amount of the proceeds will be used for general working capital needs.

More details in
2015 Annual Report in
Specuvestor: Asset - Business - Structure.
Shareholder equity has whittled from $11.5m after IPO in 2011 to $0.26m in 2017.

The $2m loan of 9% interest secured against 50% (!) of the company's shares was the canary in the coal mine.

The winners must be the property developers which KCH served. KCH suffered losses every year except for a $1.2m profit in 2013.

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