April 15 (Reuters) - Singapore agri-food company Japfa Ltd on Wednesday said it will sell a 25% stake in its dairy farming business in China to Meiji for $254.4 million, as the Japanese group expands its footprint in the Chinese dairy industry.
“This...partnership will secure the supply of quality raw milk for Meiji’s downstream operations and provide a stable revenue stream for Japfa,” Chief Executive Officer Tan Yong Nang said.
The Singapore-listed firm intends to use proceeds from the deal to repay a $253 million term loan facility, thus improving its leverage ratio and balance sheet.
Japfa added that its day-to-day operations have so far not been impacted by the coronavirus pandemic since it is involved in the provision of essential services by supplying protein foods.
“However, as this outbreak is an uprecedented event, the impact going forward cannot be reliably estimated,” the company said.
Credit Suisse (Singapore) Limited is the exclusive financial advisor to Japfa for the deal.
Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Kirsten Donovan
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