SINGAPORE (June 19): Tung Lok's wholly-owned subsidiary, Tung Lok Millennium (TLM), is disposing its entire 50% stake in T&T Gourmet Cuisine for $1.15 million.
T&T is a joint venture company set up by TLM and Maker Food Manufacturing (MFM), a wholly-owned subsidiary of Tee Yih Jia Food Manufacturing (TYJ).
TYJ is a controlling shareholder of Tung Lok, with a 19.51% stake. The purchaser is Maker Food Manufacturing (MFM).
This disposal is expected to be completed in 30 business days.
Tung Lok says T&T had been reporting declining profits in recent years and intensive competition, a higher cost structure and low economies of scale had forced the disposal.
In addition, since T&T’s inception in 2005, its shareholders have not made significant investments to increase its scale and capabilities.
As Tung Lok is in the business of operating restaurants, existing capital was set aside for its main core business, rather than being invested into T&T.
However, TYJ is prepared to invest heavily in T&T to grow the unit although this may result in losses for TYJ in the initial period.
Shares in Tung Lok last traded at 15 cents on Tuesday.
