KUALA LUMPUR: Pan Malaysia Corporation Bhd (PMC) is planning to diversify into the food and beverage (F&B) business by acquiring a 49 per cent interest in A&W Malaysia Sdn Bhd for RM69.5 million from Inter Mark Resources Sdn Bhd, in a related party deal.
The purchase price will be satisfied through a combination of RM41.7 million and the issuance of 111,127,352 new shares in PMC at RM0.25 a piece to Inter Mark, which is already a substantial shareholder of PMC.
PMC will seek shareholders' approval to go ahead with the deal as it is expected to either, divert 25 per cent or more of the net assets of PMC from its current operations or, contribute more than 25 per cent of the group's net profit.
PMC Group was principally involved in the manufacturing, marketing and distribution of confectionery and cocoa-based and other food products and investment holding.
The cash portion of the deal will be funded via a combination of the PMC Group's internally-generated funds and the proceeds from the disposal of 2.43 hectare leasehold land in Petaling, Negeri Selangor for RM41 million, which was completed on August 30, 2023
A&W Malaysia was the first fast-food restaurant in Malaysia when it started operations in 1963.
Currently, the A&W Group operates 97 outlets in Peninsular Malaysia and 3 outlets in East Malaysia.
The A&W Group recorded a loss after tax of RM7.97 million for the 18 month epriod ended June 30, 2023 mainly due to higher cost of sales and operational costs of RM229.35 million from lower gross profit margin due to increase in cost of raw materials; and increased labour costs, particularly for the last six months of the financial period under review, due to additional cost incurred to overcome staff shortage issues and reliance on foreign workers.