Highlight Ekuinas completes disposal of Burger King for RM74.6m

by **Cals** Sat 22 Aug 2015, 01:47

Highlight
Ekuinas completes disposal of Burger King for RM74.6m

KUALA LUMPUR (Aug 21): Ekuiti Nasional Bhd (Ekuinas) no longer owns shares in the Burger King restaurants in Singapore and Malaysia following the divestment of its stake in Rancak Selera Sdn Bhd for RM74.6 million.
In a statement today, Ekuinas said the sale of Rancak Selera by Ekuinas to Newscape Capital Sdn Bhd was completed recently following a sale process conducted together with BK Asiapac Pte Ltd – the master franchisor for the Burger King brand in Asia-Pacific – after Newscape submitted the best offer in terms of pricing, and demonstrated that it has the necessary financial resources and operating capabilities to bring the Burger King chain to the next level of growth.
Newscape is an investment company led by Datuk Chua Tia Guan and Lee Thiam Wah. Chua is a member of the Goods and Services Tax Monitoring Working Committee under the Ministry of Finance, while Lee is known for running the 99 Speedmart convenience store chain.
Ekuinas said the exit from Burger King brings the total realisation proceeds generated by Ekuinas from its divestment activities to RM1 billion across five investments after nearly six years in operations.
The government-linked private equity fund had acquired a 95% equity interest in the Burger King restaurant business in Malaysia and a 100% stake in the Singapore operation progressively between 2011 and 2012.

Ekuinas said the Burger King divestment generated gross proceeds of RM74.6 million, with a negative internal rate of return (IRR) of 28.1% and investment recovery of 0.45 times of capital invested across two funds.
“The divestment of the Burger King restaurant portfolio will enable the brand to be under a long term partner that possesses the financial strength and the requisite operational expertise that will best benefit this iconic brand," Ekuinas chief executive officer Datuk Abdul Rahman Ahmad said in the statement.

“This exercise has also enabled Ekuinas to successfully complete the restructuring of its food and beverage (F&B) portfolio involving our exit from the quick service restaurant segment to fully focus and expand on the core casual dining and beverage segments with brands such as Tony Roma’s, Manhattan Fish Market, New York Steak Shack, Coolblog and San Francisco Coffee.
"These F&B brands under Integrated Food Group (IFG) are growing well, with a combined revenue of RM338 million and earnings before interest, tax, depreciation and amortisation of RM36.5 million operating through more than 400 outlets across several regions,” added Abdul Rahman.

Ekuinas posted a gross portfolio return of RM677.1 million for the financial year ended Dec 31, 2014, which translates to a gross IRR of 19.6% and a net IRR of 15.3% per year.
Ekuinas had earlier this year proposed to divest Burger King to a Bumiputera consortium led by Brahim ([You must be registered and logged in to see this image.]Financial Dashboard)’s Holdings Bhd for RM95 million.
However, the deal did not materialise as Brahim’s shareholders had voted against the acquisition in an extraordinary general meeting.