Borneo Oil opening more SugarBun outlets

SugarBun, which currently operates 88 outlets, has zoomed in on northern Peninsular Malaysian states for expansion

KUCHING: Borneo Oil Bhd-owned fast-food restaurant chain SugarBun, which currently operates 88 outlets, has zoomed in on northern Peninsular Malaysian states for expansion.

Homegrown SugarBun, a well-established brand in Sarawak, will expand to Pahang with five restaurants in Kuantan.

According to the company’s executive director Raymond Teo Kiew Leong, two proposed company-owned SugarBun restaurants in Kuantan are expected to be operational in two months.

He said the company picked Pahang to spearhead the entry into the northern peninsular states as Borneo Oil had a major gold-mining operation and office in that state.

Wholly owned subsidiary Borneo Oil and Gas Corp Sdn Bhd has invested heavily in the purchase of mining machinery and equipment, and exploration activities in Bukit Ibam and Merapoh over the past two years.

“We are also targeting Kelantan, Terengganu and Penang to introduce the SugarBun brand,” Teo told StarBiz. Besides Kuantan, there will be three SugarBun restaurants in Johor Baru, two more in Sibu and an additional three in Sabah.

Teo said the company hoped to make inroads into Singapore this year, but acknowledged that the challenge was to identify a suitable location, as shop rental rates in strategic areas would be “very high.”

He added that the company was studying a joint-venture proposal with a local investor in Pontianak in Indonesia’s West Kalimantan province to establish the first SugarBun outlet.

Currently, SugarBun has 72 restaurants in Sarawak, five in Sabah and one in Kuala Lumpur, with 10 outlets in Brunei, Australia, Bangladesh and China.

Teo said to attract more investors into the franchised SugarBun business, the company would reduce the cost in setting up new outlets by simplifying its menu to limited key food items.

Under this cost-reduction strategy, the company has come up with the new SugarBun Ltd’s grab-and-go concept under “Broasted by SugarBun.” New franchisees have been promised “low entry, fast returns and empowerment of entrepreneurship” under this concept of “one-track mind food choice” to be launched soon.

Teo said the new franchise concept was modelled after Singapore-based pizza chain Pezzo. Borneo Oil holds the master licensee for Sarawak and Sabah for this chain of restaurants.

Meanwhile, Borneo Oil said Bursa Malaysia had approved the listing of up to 2.11 billion bonus shares on April 17 under the company’s proposed bonus issue, and up to 528.08 million new Warrant D under a proposed bonus issue of warrants.

The bonus issue of new ordinary shares was on the basis of four bonus shares for every eight existing shares held on an entitlement date to be determined later, while the issue of new Warrant D was on the basis of one free Warrant D for every eight existing Borneo shares.

The bonus issue of shares shall be wholly capitalised on the company’s share premium and retained profit accounts, which stands at about RM80.7mil and RM79.8mil, respectively.

Bursa has also approved the listing of additional Warrant B (up to 19.15 million warrants) and Warrant C (up to 578.78 million warrants) to be issued, arising from the adjustment pursuant to the bonus issue of new shares.

Borneo Oil said the bonus issue would increase the company’s issued share capital to a level that would be more reflective of the company’s current scale of operations and assets employed and to reward existing shareholders.

Victoria Ltd, Borneo Oil’s single-largest shareholder, has a 28.57% stake, while other substantial shareholders include Victoria Capital Sdn Bhd with 6.57% and Hap Seng Insurance Services Sdn Bhd with 6.01%.

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