BreadTalk Group chairman and founder George Quek is looking to delist from the Singapore Exchange (SGX) in the latest development of an unfolding saga surrounding the home-grown brand after its dismal financial report on Monday.
Dr Quek is making a voluntary cash offer to buy back all of the issued ordinary shares at 77 cents a piece through BTG Holding, which he owns with his wife Katherine Lee and Minor International, a hospitality and leisure company listed in Thailand.
BreadTalk on Monday night reported a net loss of $8.1 million for the fourth quarter last year, despite a net profit of $8.9 million in the same period in 2018, before the offer was announced.
The company posted a net loss of $5.2 million for the full year, compared with a net profit of $15.2 million in 2018.
BTG Holding and investors linked to it must have more than 90 per cent of the total number of ordinary shares in issue by the close of the offer for it to go through, according to a regulatory filing.
A formal offer document setting out the terms and conditions of the offer will be sent to BreadTalk shareholders between 14 days and 21 days from Monday, the filing said.
The offer will remain open for a period of at least 28 days from the date of posting of the offer document, it added.
BreadTalk noted in its financial statements filed on the SGX at about 11pm on Monday that its operating environment "remains challenging across key markets, including Singapore, China and Hong Kong".
It said: "The management team has been working actively to turn around the loss-making businesses."
The coronavirus outbreak has added further challenges to the group's operations, it added, and that "the uncertainty in Hong Kong will continue to have a negative impact on our food atrium and bakery businesses in the territory".
DBS Bank analysts Alfie Yeo and Andy Sim in a note yesterday recommended shareholders to accept BTG's offer because it is above the bank's valuation.
BreadTalk's net loss for last year.
The company's net profit in 2018.
They said BreadTalk's earnings in the fourth quarter were dragged down by its bakery business in China. They also said they expect the fallout from the virus outbreak in Wuhan to hit the food and beverage sector in China and Singapore.
"We believe shareholders would find it difficult to hold out for a higher offer price, and the offer is higher than closing prices in the past eight months."
CMC Markets analyst Margaret Yang said the delisting proposal offers investors an opportunity to exit the investment to avoid short-term headwinds.
She said: "Near-term outlook of the group is dampened by the Covid-19 impact, which hurts consumer sentiment across several key markets: Singapore, China, Hong Kong, Taiwan and Thailand."
BTG's offer comes as Dr Quek recently took on major roles in the business after a series of resignations at the top rungs of BreadTalk.
Mr Chan Ying Jian, who was BreadTalk's chief financial officer and chief investment officer, resigned to pursue other career opportunities earlier this year.
Dr Quek has since been overseeing the group's accounting, financial, treasury and tax matters with the help of the group financial controller and division financial controller.
He also took on the role of interim chief executive after Mr Henry Chu quit for health and personal reasons, the company announced in September last year.
BreadTalk requested a trading halt yesterday, with the counter having last traded at $0.645 on Friday.