The Board of Directors of BreadTalk Group Limited ("the Company") wishes to announce that its wholly-owned subsidiary, BreadTalk International Pte Ltd ("BTIPL"), has entered into a joint venture agreement ("the Agreement") with Memory Lane Sdn Bhd ("MLSB") to invest in the capital of ML Breadworks Sdn Bhd ("ML Breadworks").
ML Breadworks was incorporated in Malaysia on 08 Jan 2004 with its registered office at No 5755-3, Kidamai Industrial Estate, Kampung Bukit Angkat, Sg Chua, 43000 Kajang, Selangor. The principal activities of ML Breadworks are that of acquiring, taking over, promoting, establishing and carrying on business of a bread maker. ML Breadworks has an authorised capital of RM 100,000 and would be increasing its issued and paid up capital from RM2 to RM 3 million on completion of the agreement dated 21 June 2004.
Under the Agreement, BTIPL and MLSB would hold a 49% and 51% equity interest in ML Breadworks, respectively. Accordingly BTIPL would invest RM1.47 million and MLSB RM1.53. BTIPL will be appointing Mr Frankie Quek, Group General Manager of BreadTalk, and Mr Henry Lee, Regional General Manager, as Directors of ML Breadworks.
Prior to the Agreement, ML Breadworks, a wholly-owned subsidiary of MLSB, had a master franchise agreement with the Company's wholly-owned subsidiary, BreadTalk Pte Ltd. ML Breadworks will continue to have the master franchise agreement with BreadTalk Pte Ltd.
As MLSB has a better understanding of the Malaysia market as well as its potential, the Company's Directors view it strategic to enter into a joint venture arrangement with MLSB.
The investment will be funded by the IPO proceeds of the Company.
The investment is not expected to have any material impact on the consolidated earnings and net tangible assets per share of the Company for the financial year ending 31 December 2004.
Save as aforementioned, none of the Company's directors or controlling shareholders has any interest, direct or indirect, in the above transaction.