KUB will sell A&W busi­ness if price is right

How­ever, it reaf­firms com­mit­ment to 3-year de­vel­op­ment agree­ment end­ing June 2019

New Straits Times - - Business - OOI TEE CHING KUALA LUMPUR bt@me­di­aprima.com.my

KUB Malaysia Bhd is open to sell­ing its A&W Malaysia fast-food busi­ness if the price is right.

Its pres­i­dent and man­ag­ing di­rec­tor Datuk Ab­dul Rahim Mohd Zin said the group had re­ceived sev­eral of­fers for the fast-food fran­chise.

“We have ob­tained sev­eral pro­pos­als for our A&W busi­ness,” he said af­ter the com­pany’s share­hold­ers’ meet­ing, here, yes­ter­day.

“We are presently eval­u­at­ing them. It de­pends on the right price. If the right price comes, we are open to it,” said Rahim.

“My ra­tio­nale is cap­i­tal ra­tioning. If the right op­por­tu­nity presents it­self, we will make a call on whether to con­tinue with this busi­ness or to in­vest more in other sec­tors that of­fer bet­ter, quicker fi­nan­cial re­turns for us,” he added.

Rahim, how­ever, reaf­firmed KUB Malaysia’s com­mit­ment to a three-year de­vel­op­ment agree­ment end­ing June 2019 with A&W mas­ter fran­chisor York­shire Global Restau­rants Inc.

“We’ll com­ply with the de­vel­op­ment agree­ment, we have to pre­serve the value of the as­set by con­tin­u­ing to in­vest in new stores in com­pli­ance to the (fran­chise de­vel­op­ment) agree­ment,” he said.

Rahim said the group had al­lo­cated RM25 mil­lion to con­tinue with ex­pan­sion plans un­der the agree­ment, com­pris­ing eight new stores next year and nine more in 2019.

KUB Malaysia cur­rently has 35 A&W out­lets na­tion­wide.

When asked on the re­de­vel­op­ment of the iconic A&W restau­rant in Lorong Sul­tan, Petaling Jaya, he said Petaling Jaya City Coun­cil would give its ap­proval by July.

“We’ll be build­ing a tower with of­fice and re­tail space. The gross de­vel­op­ment value of that land par­cel amounts to RM245 mil­lion,” said Ab­dul Rahim.

To another query on its plan to set up the first re­frig­er­ated liq­ue­fied petroleum gas (LPG) ter­mi­nal, he re­vealed that the in­vest­ment cost would be about US$70 mil­lion to US$80 mil­lion (RM301 mil­lion to RM344 mil­lion).

“By boost­ing our LPG stor­age ca­pac­ity by a fur­ther 50,000 tonnes at West­ports, we’ll be able to re­duce landed costs and in­crease mar­ket share for our So­lar Gas busi­ness,” he said.

Its wholly-owned sub­sidiary, Sum­mit Petroleum (M) Sdn Bhd, is in­volved in the bot­tling, mar­ket­ing and dis­tribut­ing of LPG as cook­ing gas for house­holds and in­dus­trial uses un­der the brand name So­lar Gas.

“The de­sign work and cost­ing of the re­frig­er­ated LPG ter­mi­nal will take six months and the con­struc­tion will take three years,” he added.

With an­nual sup­ply of 10,000 tonnes, So­lar Gas has a mar­ket share of some 10 per cent, with its own ocean ter­mi­nal-cum-bot­tling plant in West­ports, Pu­lau In­dah.

PIC BY SYARAFIQ ABD SAMAD

KUB Malaysia pres­i­dent and man­ag­ing di­rec­tor Datuk Ab­dul Rahim Mohd Zin (left) and chair­man Datuk Ah­mad Ib­ni­ha­jar at a brief­ing in Kuala Lumpur yes­ter­day.

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