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Singapore's Sakae eyes leap into financial investment
Publication Date : 19-08-2014
Douglas Foo wants the frog logo of his Sakae Sushi chain to be as ubiquitous as the golden arches of McDonald's or Starbucks' twin-tailed mermaid.
He has set his sights on having 30,000 Sakae Sushi outlets across five continents one day.
To that end, Sakae Holdings, which owns the Sakae Sushi chain, is seeking shareholders' approval to diversify into financial investment, fund management and corporate finance advisory services. An extraordinary general meeting will be held on Sept 2.
The mainboard-listed firm is already working to develop its capabilities in human capital, sustainable food resources and real estate management.
This latest move rounds out its strategy to fund its expansion plan and build Sakae into a global brand, said Foo, its founder and executive chairman.
The idea for the proposed diversification emerged while he was doing a two-month stint in the United States on an Eisenhower Fellowship programme, designed for entrepreneurs and mid-career professionals worldwide.
"What inspired me was the General Electric model, which also has a capital arm that creates a stream of funding to assist other parts of the organisation in achieving its goals...
"GE Capital generates cash flow for the group to fund development of its medical and aviation divisions," he told The Straits Times yesterday.
The group expects its corporate finance and financial services arm to provide a larger network of contacts and access to financial services and diversified sources of income to help fund the expansion of its food and beverage business overseas.
In addition to its flagship Sakae Sushi brand, the group has developed other brands such as Sakae Teppanyaki, Sakae Express, Crepes & Creams, Hei Sushi, Senjyu, Sachi and Kyo by Sakae. It manages more than 100 restaurants in Singapore, Malaysia, the Philippines, Indonesia, Thailand, Vietnam, India and China.
Subject to shareholders' approval, the group plans to incorporate three new units here to carry out its investment, fund management and advisory businesses.
It will fund these businesses with S$10.5 million (US$8.44 million) from internal funds, retained earnings from its operations and existing credit facilities.
About S$10 million (us$8.04 million) will be used to fund the investment company and S$250,000 (US$200,896) each for the fund management and advisory companies, Sakae said.
Upon approval, the group will apply to the Monetary Authority of Singapore to register the fund management company as a registered fund management company (RFMC), and hire another two corporate finance professionals to apply for a capital markets services licence to carry out corporate finance advisory services.
The value of assets managed by the RFMC would not exceed S$250 million (US$200.90 million) and would not involve retail investors.
"The proposed diversification will place the group in a better position to capitalise on growth prospects of both Singapore and overseas markets.
"The group aims to take advantage of the opportunities in these markets by investing in investee companies which operate in these markets, making investments for the funds managed by the group, and providing corporate advisory services," said Sakae in a statement.
Revenue for the investment business will come from capital gains and recurring dividend income from Sakae's investments in securities of the investee companies, while that for the fund management business will come from management fees and performance fees. Revenue for the advisory business will come from consultancy fees and commissions.
- See more at: http://www.straitstimes.com/news/business/companies/story/sakae-eyes-leap-financial-investment-20140819#sthash.WeQJEG82.dpuf