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Jumbo's Taiwan JV incorporated, to ramp up operational efficiency
JUMBO Group's indirect wholly-owned unit Jumbo F&B Services (JFB) has signed an 80:20 joint venture (JV) agreement with strategic partner Baipin Co to boost the group's overall operational efficiency in the Taiwanese market.
The newly-incorporated JV company, named Jumbo F&B Services (Taiwan), will take over from Ho Sing Food Co to manage the business and "certain assets and liabilities" relating to the Jumbo Seafood restaurants in Taiwan, said the group in a filing on Thursday.
Baipin and JFB have a 51 per cent and 49 per cent stake respectively in Ho Sing Food, the current franchisee for both Jumbo Seafood restaurants and Ng Ah Sio Bak Kut Teh outlets in Taiwan. The Ng Ah Sio chain was brought under Jumbo's group of restaurants in 2010.
Having the new JV company manage the Jumbo Seafood restaurants will allow Ho Sing Food to better focus on expanding the Ng Ah Sio Bak Kut Teh brand in Taiwan. This new arrangement will "improve operational efficiency for both brands", said the group.
JFB and Baipin have subscribed for 32 million and eight million ordinary shares respectively in the new JV company, with an aggregate consideration of Tw$40 million (S$1.9 million).
Jumbo said its investment in the JV company will be funded by internal resources. The JV is not expected to have any material impact on the net tangible assets per share and earnings per share of the group for its fiscal year ending Sept 30, 2020.
Shares of Catalist-listed Jumbo closed flat at S$0.375 on Thursday before the announcement.