KUALA LUMPUR (Aug 13): Tomei Consolidated Bhd (KL:TOMEI) is partnering pawnbroking operator Ta Yoong Group for its pawnbroking venture.

In a bourse filing Thursday, Tomei said its wholly-owned unit Tomei Services Sdn Bhd has inked a joint venture agreement with TY Net Sdn Bhd — a wholly-owned unit of Ta Yoong Sdn Bhd — for the collaboration of the business that is parked under JP United Sdn Bhd (JPU).

JPU holds 39 dormant indirect subsidiaries set up to operate pawnshop outlets across agreed locations.

Under the agreement, TY Net will subscribe for 12.195 million new shares in JPU for RM12.195 million cash, while Tomei Services will subscribe for an additional 54,998 shares for RM54,998. On completion of the allotment, TY Net will have a 45% stake in JPU, while Tomei will hold a 55% stake.

Under the operational arrangement, Tomei Services will handle financial strategic direction, accounting and licensing approvals for the joint venture, while TY Net will provide business strategy, technical know-how and build client relationships.

The 39 dormant subsidiaries will be entering into separate related agreements with Ta Yoong Group entities before commencing operations, including appointing Mainsource Management Sdn Bhd for operational management, securing a non-exclusive licence to use the 'Pawnzon' brand, as well as a non-exclusive licence to use a software developed by the Ta Yoong Group for the pawnbroking business.

Tomei said the joint venture allows both parties to combine their operational expertise in pawnshops, leverage each other’s business networks and client bases, and tap into available financial resources to expand the pawnbroking business.

Tomei’s shares closed unchanged at RM1.81 on Thursday, giving the group a market capitalisation of RM250.89 million.