Sheng Siong signs joint-venture deal to run supermarkets in China

SINGAPORE-LISTED Sheng Siong Group has signed a conditional joint-venture (JV) agreement with Kunming LuChen Group Co Ltd to operate supermarkets in China.

In an announcement posted on the Singapore Exchange (SGX) website on Saturday, Sheng Siong said the conditional JV agreement was made with the LuChen Group as well as its executive director, Tan Ling San.

Under the conditional agreement, the proposed JV company will be incorporated under the laws of China with a registered capital of US$10 million.

Sheng Siong will fork out US$6 million for 60 per cent equity interest in the JV company, while the LuChen Group will provide a cash consideration of US$3 million for 30 per cent of the equity interest.

Mr Tan will hold the remaining 10 per cent stake for US$1 million.

He will be responsible for the administration and implementation of Sheng Siong's policies and strategies, and evaluating new growth areas for business. He founded and served as the executive chairman of PSC Corporation.

Sheng Siong said the conditional agreement remains subject to the approval of the Chinese authorities.

LuChen, established in 1954, is involved in the manufacture and distribution of food products such as sauces and condiments.