Chaswood Resources to divest TGI Friday's and Teh Tarik Place in Malaysia for RM8m to repay loans, creditors

Chaswood Resources has entered into a binding term sheet for the sale of certain subsidiaries which own the TGI Friday's in Malaysia and Teh Tarik Place businesses
Chaswood Resources has entered into a binding term sheet for the sale of certain subsidiaries which own the TGI Friday's in Malaysia and Teh Tarik Place businessesPHOTO: INSTAGRAM / TEH TARIK PLACE

SINGAPORE - Chaswood Resources Holdings' wholly owned unit, Chaswood Resources (CRSB), has entered into a binding term sheet for the sale of certain subsidiaries which own the TGI Friday's in Malaysia and Teh Tarik Place businesses to Bursa Malaysia-listed Sino Hua-An International for RM8 million (S$2.6 million).

The proposed disposal will be carried out through the sale of investment holding company Bistromalones.

The subsidiaries being divested recorded a net loss after tax of about RM90.4 million for the financial year ended Dec 31, 2017 and a net profit after tax of RM40,000 for the six months financial period ended June 30, 2018.

The proposed disposal is part of an ongoing restructuring involving the group's business, and is in line with the proposed scheme of arrangement with the group's financial institution lenders which has been approved by the scheme creditors in a court convened meeting held on Nov 9. The scheme of arrangement is still subject to the court's approval.

The group will recognise a loss of about RM18.4 million from the proposed disposal, which may be subject to accounting adjustments when the deal is finalised.

Chaswood said: "The board is of the view that the proposed disposal is in the best interest of the company and the shareholders as it will restore the financial position of the company and provide better value to the shareholder with the completion of the restructuring exercise."

The entire net sale proceeds will be used to partially repay the group's outstanding loans to financial institution lenders, as well as to repay trade and other creditors of the group.