SINGAPORE (Sept 18): F&B group Envictus International Holdings is selling all six of its Texas Chicken outlets in Indonesia at a loss on disposal of RM1.5 million ($478,000) – just one year after the commencement of business in September 2018.
In a regulatory filing on Wednesday, the group says that its wholly-owned Indonesian subsidiary PT Quick Service Restaurant has entered into a sale and purchase agreement to sell the six Texas Chicken outlets in Indonesia – including the master franchise agreement, all the fixtures and fittings, kitchen equipment, deposits and prepayments – to PT Quick Serve Indonesia.
The purchaser is the franchisee of Texas Chicken in Indonesia for the territory of Surabaya.
Envictus says it intends to cease its Texas Chicken operations in Indonesia in order to focus on its Texas Chicken operations in Malaysia, which are starting to show a positive bottom line.
As at end June, the group has 54 Texas Chicken outlets in Malaysia.
The group says its Texas Chicken operations in Indonesia have been loss-making since the commencement of business in September last year, amounting to accumulated losses of approximately 15.3 billion Indonesian rupiah ($1.5 million).
It adds that the proposed disposal represents a good opportunity for the group to dispose of the assets of a loss-making business and obtain some consideration for it.
The net proceeds from the proposed disposal is intended to be used for general working capital purposes of the group.
PT Quick Serve Indonesia has agreed to take over the assets of Texas Chicken Indonesia outlets and bear its cost of operations from Oct 1, while the ownership of the outlets will be transferred over in end-March next year.
For the latest 3Q19 ended June, Envictus reported a net loss of RM2.2 million, narrowing from a net loss of RM7.5 million a year ago.
Shares in Envictus closed 0.1 cent higher at 13.1 cents on Wednesday before the announcement – less than half of its closing price of 30 cents this time last year on Sept 19, 2018.
