KUB aims to seal sale of A&W by year-end
SHAH ALAM: KUB Malaysia Bhd is looking to complete the sale of A&W (M) Sdn Bhd by the end of the year.
Group managing director Datuk Abdul Rahim Mohd Zain said the quick-service restaurant chain was eating up its capital expenditure, which it would rather use to expand its core businesses.
He said KUB was bound by the franchise agreement to open eight to 10 outlets a year, costing about RM700,000 to RM1.2 million each. The firm is required to hit 50 stores by June next year. It currently has 40 stores.
Based on its latest annual report, there were some loss-making A&W outlets and KUB has to relocate these outlets without reducing the number.
“We have only limited funds and we will use those to expand our core businesses. We aim to increase the funds with proceeds from the sale of A&W.
“On the sale value, if you want to compare it with other listed food and beverage companies, the valuation is 10 times the cash flow.
“We are realistic so we are looking at about 20 to 30 per cent discount,” said Rahim after KUB’s annual general meeting, here, yesterday.
The talks have taken place for two years as the company is still waiting for the right price to sell.
Rahim said there were 11 potential buyers.
“Most of them are backed by private equity firms.”
Rahim also said KUB planned to build more telecommunication towers in developed areas within two years to boost its information and communications technology (ICT) business.
“The towers would be something like what edotco Group Sdn Bhd is doing, but on a smaller scale,” he said.
The company’s ICT tender book stands at around RM300 million.