SINGAPORE - Cocoa ingredient maker JB Foods will buy an 80 per cent stake in PT JeBe Koko, a cocoa bean processing facility in Gresik, Indonesia, for $23 miillion.

The firm will issue 38 million new shares at 30 cents apiece to fund the acquisition, it said in a statement on Tuesday.

This represents a 42.3 per cent discount to the proportionate fair value of the proposed acquisition at US$31.9 million, according to an independent valuer appointed by the firm.

"PT JeBe Koko has been part of our operational supply chain and we feel it is timely to exercise our call option so that we can fully integrate our cocoa ingredient production facility," said Mr Tey How Keong, chief executive of the firm.

The acquisition will also help the firm save on export taxes imposed on cocoa beans since 2010, added Mr Tey.

JB Foods will also fork out $11.6 million in cash, which it plans to raise through a rights issue. It is proposing to issue one rights share for every two shares at an exercise price of 12 cents apiece. This is expected to raise up to $28.8 million if all shareholders subscribe to exercise. The remainder will be used for the firm's general operations and working capital.

Tee Yih Jia Food Manufacturing, a major shareholder in JB Foods, as well as Mr Tey and his family, have undertaken to fully subscribe to the rights issue.

PT Jebe Koko reported a net profit of $2.5 million for the 12 months to Dec 31, and an operating revenue of $79.9 million in the same period.