KUALA LUMPUR (Aug 15): Malaysian Bulk Carriers Bhd (Maybulk) is investing an estimated RM54.38 million to diversify into grocery retail business by collaborating with the operator of a retail chain under the Tunas Manja Group (TMG).

The related party transaction will see Maybulk rolling out 30 outlets under the TMG brand, comprising supermarket and convenience store set-up costs, inventory purchases and working capital, Maybulk said in a bourse filing.

The shipping group sees the grocery business making up 25% of its net assets. The diversification will require approval by Maybulk shareholders.

The TMG Mart chain is operated by Tunas Manja Sdn Bhd (TMSB). According to the company's website, it has 85 stores across Pahang, Terengganu, Negeri Sembilan, Kelantan, Johor, and the Klang Valley.

Under a three-year collaboration agreement, TMSB will supply grocery products to Maybulk and generally assist the latter in the establishment of outlets (including staff training, management and marketing) and securing the necessary licences for the business.

However, Maybulk will pay a one-time initial set-up and renovation fee for each outlet, with a monthly support service fee of 1.25% of total revenue of Maybulk’s grocery businesses.

Maybulk will use the TMG Mart or TMG Express brands, while Maybulk will have the first right of refusal, should TMSB plan to dispose of its retail grocery business to any third party.

The agreement also entails Maybulk having the exclusive right to establish new outlets in Kuala Lumpur, Putrajaya, Selangor, Negeri Sembilan and Melaka.

Maybulk’s recently-appointed directors Datuk Chin Yoke Choon and Datuk Chin Yoke Kan own 16% in the group through Tunas Capital Sdn Bhd. The duo each own a 35% stake in Tunas Manja, with three family members owning the remaining 30% stake.

Maybulk, which is involved in the shipping business, turned to profit in 2021 but has seen its fleet size shrink, following sale of ageing vessels. In the filing, Maybulk said the collaboration follows a strategic review of the group’s future direction to drive earnings growth and strengthen its financial position.

Shares of Maybulk settled unchanged at 40.5 sen on Monday (Aug 15), giving the group a market capitalisation of RM400.06 million. Year-to-date, the counter has retreated by 22.86%.