KUB aims to sell A&W by year-end

A&W was the first fast food restaurant in Taman Jaya where families from Section 10 could be seen enjoying root beer and hotdog on Sundays. — filepic

SHAH ALAM: KUB Malaysia Bhd is targeting to sell its fast food chain, A and W (M) Sdn Bhd by year-end.

President/Group Managing Director Datuk Abdul Rahim Mohd Zin said several potential buyers had expressed interest on the matter.

“However, we are still looking for the buyer who can offer us the right valuation and terms of payment,” he told a press conference after the company’s annual general meeting here, today.

Abdul Rahim said typically, the valuation would be about 10 times the company’s cash flow valuation.

“If we could achieve that, it would be very good, but they might give a discount of 20-30 per cent from the valuation to a listed company,” he said.

It was reported that under its franchise agreement with A Great American Brand LLC until June 2019, KUB was obliged to open 25 new A and W restaurants in three years, increasing the number of A and W restaurants in Malaysia to 52 by end-2019.

“We have opened five restaurants in the Peninsular to-date, and will open at least another six by end of the year,” he said, adding that the company had set aside about RM600,000 to RM700,000 per restaurant from its capital expenditure.

There are more than 500 staff currently working with A and W.

Meanwhile, on another note, Abdul Rahim said KUB was looking at monetising the 0.42 hectare land on which the A and W outlet in Taman Jaya (Petaling Jaya) is situated.

He said the land has a gross development value of about RM245 million and a market value of RM28 million, but could fetch a premium of RM10 million over the valuation price.

“We managed to obtain the development order from Petaling Jaya Municipal Council (MPPJ) and are in talks with several property developers.

“The discussion on whether we will jointly develop the property, or look for a property buyout is expected to be concluded by year-end,” he said, adding that the development would probably take place next year. - Bernama