KUALA LUMPUR: Bursa Malaysia-listed food and beverage (F&B) player Dolphin International Bhd yesterday announced several strategic initiatives aimed at bolstering its position within the F&B sector.
These initiatives include a proposed variation to the sale and purchase agreement (SSA), a proposed private placement, and a proposed change of the company’s name to Oasis Harvest Corporation Bhd.
Dolphin, through its wholly owned subsidiary Asia Poly Food and Beverage Sdn Bhd, has entered into a proposed variation to the SSA with Datuk Yeo Boon Leong, Yeo Boon Thai, Yeo Boon Ho, and Yeo Soon Bee (collectively, the Vendors). This variation pertains to the acquisition of the entire equity interest in High Reserve F&B Sdn Bhd for RM36 million, where certain payment terms will be varied or waived.
Due to the financial underperformance of High Reserve Group during the financial years ending June 30, 2023, and June 30, 2024, the proposed variation will enable Asia Poly Food and Beverage Sdn Bhd not to pay the remaining RM9.55 million and will receive RM4.85 million as compensation for the losses incurred.
High Reserve Group faced a significant decline in revenue, dropping from RM9.19 million in FY30 June 2022 to RM8.41 million in FY30 June 2023 and RM7.61 million in FYE30 June 2024, respectively – due to declining customer traffic in the Uncle Don’s outlets, particularly in Rawang and Ipoh. The loss after tax of High Reserve Group also increased from RM0.56 million in FY30 June 2022 to RM4.61 million during the FY30 June 2023 primarily due to the recognition of impairment losses on investments in subsidiary companies amounting to RM3.95 million.
Dolphin executive director Ch’ng Eu Vern said, “The rationale behind entering the proposed variation to the SSA is to mitigate the financial impact of High Reserve Group’s underperformance and to better align our financial commitments with our strategic goals. This adjustment allows us to focus on more profitable ventures while maintaining a healthy balance sheet.”
Additionally, Dolphin proposes a private placement that is expected to raise gross proceeds of up to RM2.44 million at an illustrative issue price of RM0.182 per placement share. The funds will primarily support the working capital for the company’s F&B business and trading segment.
In line with its strategic focus and to better reflect the company’s updated corporate identity and purpose, Dolphin proposes changing its name to Oasis Harvest Corporation Bhd. This rebranding aligns with the company’s core business and values, aiming to enhance public confidence and stakeholder engagement.
Ch’ng remains upbeat about its prospects in the F&B sector, and Dolphin is focused on expanding this area further. Future plans include actively pursuing mergers and acquisitions with other F&B outlets that synergise with Dolphin’s current operations.
The company is also implementing a customer relationship management system to enhance customer retention and satisfaction across all restaurant outlets, with a focus on targeted marketing strategies to cater to changing customer preferences.
The F&B sector in Malaysia is projected to grow significantly, driven by increased tourism and consumer spending. The sector is anticipated to grow by 10.4% in 2023, with continued growth expected in 2024. Dolphin is well-positioned to capitalise on these trends and drive sustainable growth and shareholder value.
UOB KayHian is the principal adviser for the proposals, and SCS Global Advisory (M) Sdn Bhd has been appointed as the independent adviser.
