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F&N provides guarantees for Charoen Sirivadhanabhakdi's Starbucks Thailand deal

MAINBOARD-LISTED drinks maker Fraser and Neave (F&N) will offer corporate guarantees to third-party lenders for associate Coffee Concepts (Thailand) Co’s financial obligations, according to an interested-person transaction disclosure filed on Friday.

The corporate guarantees, for up to 2.91 billion baht (S$129.8 million), are for loan facilities related to Coffee Concepts (Thailand) Co’s purchase last year of Starbucks’ Thailand business.

The deal is deemed an interested-person transaction because Thai tycoon Charoen Sirivadhanabhakdi, a controlling shareholder and director of F&N, is linked to the joint-venture partner Green Bean Co in the Starbucks deal, as is his wife Wanna Sirivadhanabhakdi.

F&N said in 2019 that it would provide guarantees of up to US$272 million for the Starbucks purchase. Its F&N audit committee has now approved F&N Treasury unit’s entry into the corporate guarantees as it believes that each joint-venture partner is carrying a fair share of risk and reward.

Also, the terms of the joint venture were not found to be prejudicial to the interests of either F&N or its minority shareholders, said the board on Friday.

The counter added S$0.01, or 0.59 per cent, to S$1.70, before the announcement.