3/5/2019 – Food Holding, a wholly-owned subsidiary of Thai-listed Electronics Industry Pcl (EIC) has acquired ordinary shares of Eastern Cuisine (Thailand) for 300 million baht, that translates to about US$9.38 million.
According to EIC’s filing to the Stock Exchange of Thailand, the acquisition is set to get the approval from shareholders in June while the transaction is expected to be completed within the third quarter of 2019.
From the total 300 million baht, 75 million baht (about US$2.34 million) will come from selling certain shares of EIC, whereas another 25 million baht (about US$780k) will be derived from internal cash flow. Food Holdings will take up a loan for the remaining 200 million baht.
If successful, Food Holding will own Eastern Cuisine’s eight Kagonoya restaurants in Thailand, which are famous for their Japanese-styled shabu shabu buffet dining in Osaka.
“The acquisition will help diversify risk from operating electronic parts business and the rental of advertising space on out-of-home billboards, while creating the stability for the company in the long run,” said EIC’s chief executive Kusol Sangkananta.
He added that Eastern Cuisine would generate an internal rate of return of 9-13 percent.
Based on the company’s internal audit information, Eastern Cuisine to date has recorded 102.97 million baht (about US$3.21 million) in sales revenue and a net loss of 11.75 million baht (about US$366K) in 2018.
Moving forward, EIC plans to increase the marketing budget for Eastern Cuisine from 1.5 percent in 2018 to 5 percent in 2019 and set the growth rate to be equivalent to the inflation from 2019 onwards. The company also plans to increase its average number of bills per day to 40 by 2023 from its current record of 18.6.
This news is published on Reuters.