Friday 29 Mar 2024
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KUALA LUMPUR(Nov 24): Berjaya Food Bhd (BFood) is exiting the Kenny Rogers restaurant business in Indonesia with the disposal of a 99.9% stake in PT Boga Lestari Sentosa.

BFood said the disposal provides an opportunity for the group to divest its non-profitable foreign investment and recover a portion of the inter-company debt.

In a filing with Bursa Malaysia this evening, BFood said its wholly-owned subsidiary Berjaya Food International Sdn Bhd (BFI) has entered into an agreement to dispose of its entire 99.9% stake comprising 13.82 million shares in PT Boga to Rudy Wiguna and Komelia Ersan, and to settle a portion of the inter-company debt owing by PT Boga to BFI amounting to IDR9.6 billion (equivalent to about RM3.1 million).

The cash consideration for the disposal is only a nominal sum of IDR 1,000 (equivalent to about 32 sen). The original cost of investment in PT Boga was RM33.98 million and it has been fully impaired to date.

The nominal consideration for the disposal was arrived at after taking into consideration the past yearly losses and the shareholders’ deficit of PT Boga of IDR114.65 billion (equivalent to about RM36.75 million) as at Aug 31, 2017.

The disposal was completed upon the execution of the agreement with the receipt of the cash consideration.

PT Boga has been involved in developing and operating Kenny Rogers Roasters restaurants in Indonesia since 2011 and currently has 10 restaurants located in Jakarta. To recap BFood had on July 26 2011 entered into a conditional joint venture agreement with PT Mitra Samaya, PT Harapan Swasti Sentosa and PT Boga to develop and operate the Kenny Rogers Roasters franchise in Java Island and Bali under PT Boga.

According to BFood’s latest annual report, PT Boga’s loss before tax increased to RM9 million in the financial year ended April 30, 2017 from RM7.6 million in the previous financial year. The higher loss was mainly due to impairment of fixed assets from the closure of non-performing restaurants. PT had closed a total of seven restaurants during the financial year under review.

Based on BFood’s first quarter results ended July 31, 2017 on a pro forma basis, the disposal of PT Boga resulted in a loss of about RM13.27 million or 3.53 sen per share.

BFood shares closed unchanged at RM1.67 today, and for a market capitalisation of RM627 million.

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