Jakarta (TheInsiderStories) – Singapore’ food and beverage (F&B) producer, BreadTalk Group Ltd., will acquire 1.48 million shares or 100 percent shares Lippo Group‘ food court operator, Food Junction Management Pte. Ltd. (FJM), said the company today (09/02).
The acquisition value around S$80 million or $57.55 million and will be paid using 40 percent of the company’ internal cash and the remaining 60 percent from bank loans. It said, both companies signed a sales and purchase agreement on August 30.
BreadTalk says the proposed acquisition will provide the group with access to FJM’ existing network of food courts and F&B outlets and allowing the group to obtain additional revenue streams and benefit from the synergies with the group’ existing food court and F&B outlet business through the streamlining of the costs.
FJM is a retail company that listed on Singapore Stock Exchange. Currently, FJM has 12 outlets and T&W Food Junction Sdn. Bhd in Malaysia manage three outlets. In 2020, T&W Food Junction plan to open a new outlet in Johor, Malaysia.
Food Junction is indirectly owned 98.10 percent by Lippo Group through its subsidiary Auric Pacific Group Limited (APGL), which is engaged in the business of producing and retailing food, restaurants and food court management.
APGL’ shares are 74.99 percent owned by Lippo China Resorces Limited (LCR), which controls a 50.3 percent stake in Food Junction. The remaining 49.7 percent of APGL shares are owned by the Chairman and Executive Director of Lippo Group and LCR, Stephen Riady and his son-in-law Andy Adhiwana.
Recently, the group owned by Riyadi family has looking various funding sources to restructure its unit’ debt portfolio. Last June, its property developer subsidiary, PT Lippo Karawaci Tbk (IDX: LPKR) offered 47.82 billion shares or 67.74 percent of its issued and paid capital with indicative price Rp235 a share.
Its expecting the company would get Rp11.23 trillion ($790.85 million) for paying debt, paying company’ obligations, and increasing direct and indirect participation of subsidiaries.
On March 22, Lippo Karawaci announced has secured funding around $1.01 billion to support the businesses and pay the debts. The funding comprising of $730 million from right issue and $280 million from the completion of its asset divestment plans.
The developer said, the two fund managers, George Raymond Zage III and Chow Tai Fook Nominee Ltd., have signed an undertaking agreement to purchase rights and to subscribe the rights issue shares with a total commitment of $70 million.
While, the Riady family, through PT Inti Anugerah Pratama or its wholly owned subsidiary, will act as a standby purchaser for any remaining rights issue shares not subscribed by other shareholders. The rights issue has raised the approval on April 18.
For the divestment plans, Lippo Karawaci has objective of realizing a total of $280 million of proceeds by end 2019. On Jan. 10, the unit of Lippo Group announced the sale of its interest in two healthcare joint ventures in Myanmar, a 40 percent stake in Yoma Siloam Hospital Pun Hlaing Ltd., and a 35 percent stake in Pun Hlaing International Hospital Lmtd., to OUE Lippo Healthcare Ltd.
The sale is expected to generate $20 million of net proceeds when the transaction is completed in first half of 2019. Then, On March 11, LPKR entered into a conditional sale and purchase agreement with Lippo Malls Indonesia Retail Trust, pursuant to which the developer agreed to sell the retail components of Lippo Mall Puri for an aggregate consideration of $260 million.
This funding program is set to right-size Lippo Karawaci’ balance sheet through deleveraging and repayment of up to $275 million of debt obligations, provide the company with sufficient liquidity buffer to fund debt interest and REITs rental obligations through year end 2020 and unlock shareholder value through investments in existing key projects.
Over the next three years, LPKR intends to invest up to $100 million of the funding proceeds in the development of eight existing key projects currently under construction–Holland Village, Millennium Village, Monaco Bay Residences, St. Moritz Makassar, Kemang Office, Embarcadero, Lippo Office Thamrin and Holland Village Manado.
The cost to complete these existing projects is estimated to amount to around $275 million, and will be fully funded by the $100 million investment capital, account receivables to be received from units sold, and future sales from completed projects and projects in construction.
Other units, PT Lippo Cikarang Tbk (IDX: LPCK) is going to give debt to Meikarta’ project developer in Bekasi, East Java, PT Mahkota Sentosa Utama for working capital via rights issue. Its unit will issue 1.98 billion shares at Rp1,495 a piece to raise Rp2.96 trillion funding from the rights issue.
Lippo Karawaci trough the unit intended to invest up to $200 million of the funding to develop Meikarta projects, by subscribing 54.4 percent rights entitlement, and acting as standby purchaser for any remaining rights issue shares not subscribed by other shareholders of LPCK. The unit planned to issue new shares with total amount $200 million.
The Meikarta project is expected to be the next breakthrough integrated development that will boast world-class infrastructure and facilities including shopping malls, international hospitals, universities, an international exhibition center, as well as a financial and technology hub.
Lastly, as part of the sale of Puri Mall, the company expects to incur transaction-related taxes and expenses and REITs rental obligations amounting to $60 million.Additionally, LPKR is committed to maintaining its existing 30.7 percent stake in LMIRT by participating in the potential future equity fundraising by LMIRT associated with the acquisition of Puri Mall. Its estimated that this would require approximately $60 million of funding from the parent company.
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