UOA Development embarks on F&B business venture with RM21.2m start-up cost

• UOA said its units Armada Hartasegar Sdn Bhd and Regenta Development Sdn Bhd had on June 14 entered into a term sheet agreement with Hokkien Peng Restaurant Group Sdn Bhd and Hoteland Sdn Bhd.

KUALA LUMPUR (June 14): Property developer UOA Development Bhd has proposed to venture into the food & beverages (F&B) business.

In a filing with the stock exchange on Wednesday (June 14), UOA said its units Armada Hartasegar Sdn Bhd and Regenta Development Sdn Bhd had on June 14 entered into a term sheet agreement with Hokkien Peng Restaurant Group Sdn Bhd and Hoteland Sdn Bhd.

Hokkien Peng is a private limited company whose main business activities lie in investment holdings, whereas Hoteland’s two units Bamboo Estate and Bamboo Circle are engaged in the F&B business, namely Botanica Co Restaurant and Potager.

Armada will provide the set-up cost of the business which amounts to RM21.17 million by way of subscription of redeemable preference shares (RPS) in Hoteland at a subscription price of RM1 per RPS.

As such, Hoteland will become a 51%-owned subsidiary of UOA.

“Subject to Hoteland making a profit, the redemption of the RPS by Hoteland can be made partially or wholly on a yearly basis after the issuance of the RPS whereby the redemption share be the same as the subscription price.

“The redemption price will be the same as the subscription price and if the redemption of the RPS is made after five years from the issuance of the RPS, Hoteland will fully pay a cumulative dividend of 8% per annum up to the date of redemption of all the RPS. The RPS do not carry any voting rights,” said UOA.

UOA said the term sheet has no immediate effect on its earnings, net assets and gearing, nor is it subject to the approval of shareholders and any relevant authorities.

Shares of UOA closed unchanged at RM1.60, with a market capitalisation of RM3.85 billion.