KUALA LUMPUR (Jan 14): Kawan Food Bhd’s (KL:KAWAN) plan to set up an information technology equipment joint venture (JV) with several individuals, including its founder cum major shareholder, and current chairman, has fallen through.
Talks ceased after Kawan Food and Sun Cheng Leng, Huang Er-Wen, Gan Thiam Chai and Lim Hun Soon @ David Lim failed to arrive at a consensus on revised terms for the JV, according to the frozen food manufacturer’s bourse filing on Tuesday.
“The board of directors of the company wishes to announce that all parties were unable to reach an agreement on the revised terms of the JV. Hence, all negotiations have ceased,” the filing read.
Gan is chairman emeritus of Kawan Food as well as founder controlling a 36.86% stake in the group, while Lim is its current chairman.
Lim also sits on the boards of Press Metal Aluminium Holdings Bhd, TSA Group Bhd and Public Investment Bank Bhd as independent non-executive director.
Kawan Food announced the JV in a Dec 6 filing, saying its wholly owned unit KG Pastry Marketing Sdn Bhd had inked a JV agreement with the four individuals to undertake the business.
KG Pastry Marketing was to own a 51% stake in the JV, followed by Sun with 30%, Huang with 9%, and Gan and Lim with 5% each. The JV was to acquire engineering services and industrial automation firm Realtech Automation Sdn Bhd from Sun for RM2.5 million.
A couple of days later, Kawan Food said the parties had decided to renegotiate the terms of the JV agreement, mutually terminating the initially signed deal.
Shares in Kawan Food ended unchanged at RM1.63, valuing the group at RM593.38 million.