Kimly unit in joint venture to run coffee shops in Bukit Batok, Serangoon North

KIMLY has entered into a joint venture (JV) agreement through its wholly-owned subsidiary Kimly Makan Place to manage two coffee shops in Bukit Batok and Serangoon North, the coffee shop operator said on Thursday.

The coffee shops are located at Block 233 Bukit Batok East Avenue 5 and Block 153A Serangoon North Avenue 1. Kimly Makan Place will manage the coffee shops under the JV with Tade Group, a private company in the business of letting and operating self-owned or leased food courts, coffee shops and eating houses.

Kimly Makan Place has injected working capital of S$147,000 as consideration for its 49 per cent stake in the JV company Zhen Wei Food House. Tade Group holds the other 51 per cent for a consideration of S$152,900.

The Kimly subsidiary also paid Tade Group lease assignment fees of S$588,000 for the Bukit Batok coffee shop and about S$1.13 million for the Serangoon North coffee shop.

The aggregate consideration of S$1.86 million has been paid in cash using the net proceeds from the company's initial public offering.

Kimly said that the joint venture is in line with its strategy to expand its network of food outlets locally and to establish new outlets and stalls as and when strategic locations become available. This will help the group diversify and expand its revenue stream and mitigate uncertainties in the private leasing category.

It will continue to strengthen its market presence by opening more food stalls under its food retail division, which is complemented by its central kitchen. It will also continue to explore opportunities to acquire and/or operate more strategically located coffee shops in mature estates with established footfalls.

Kimly shares closed flat at S$0.32 on Thursday.