KUALA LUMPUR (Feb 23): Kuantan Flour Mills Bhd (KFM) has entered into a memorandum of understanding (MoU) with MCM Petcare Sdn Bhd for a proposed collaboration between the two parties, as KFM eyes expanding into the pet food business.

In its filing with the stock exchange, KFM said the parties could team up via a business collaboration agreement or a direct acquisition of a majority equity interest in MCM.

It said the collaboration could see KFM being involved in the trading and retailing of pet food products, and potentially expand into the manufacturing of the products.

"Upon the execution of this MoU, the parties shall negotiate in good faith on the terms and conditions of the definitive agreement to be entered into between the parties and endeavour to execute the definitive agreement within six months from the date of this MoU," said the company.

The Practice Note 17 company had submitted its proposed regularisation plan to the bourse in September last year, but was yet to be approved by Bursa Malaysia, which resulted in a qualified opinion by KFM's external auditors on its financial statements for the financial year ended Sept 30, 2017.

KFM's share price closed down 1 sen or 6.67% at 14 sen, giving a market capitalisation of RM10.23 million.