According to EIC’s filing to the Stock Exchange of Thailand today, the acquisition is set to get the approval from the shareholders in June while the transaction is expected to be completed within the third quarter of this year.
Eastern Cuisine, which has been running Japanese-styled shabu buffet restaurants under the Kagonoya brand in Osaka for over eight years, currently runs eight branches of Kagonoya in Thailand.
Of the total 300 million baht, 75 million baht will come from selling certain shares of EIC, another 25 million baht will be from internal cash flow and the remaining 200 baht from loans.
“The acquisition will help diversify risk from operating electronic parts business and the rental of advertising space on out-of-home billboards, while creating the stability for the company in the long run,” said EIC’s chief executive Kusol Sangkananta.
He added that Eastern Cuisine would generate an internal rate of return of 9-13 per cent.
Eastern Cuisine recorded 102.97 million baht in sales revenue and the net loss of 11.75 million baht in 2018, according to the company’s internal audit information.
EIC plans to increase the marketing budget for Eastern Cuisine from 1.5 per cent in 2018 to 5 per cent in 2019 and set the growth rate to be equivalent to the inflation from 2019 onwards. Eastern Cuisine recorded the average number of bills per day of around 18.6 and EIC targets to boost it to 40 by 2023.