Kimly Limited has, on Jan 21, entered into a joint venture agreement (JVA) with Jin Xin Yuan to operate and manage the short-term HDB coffeeshop lease located at Block 134 Lorong Ah Soo, #01-454.

The JVA was signed by Kimly’s subsidiary Kimly Makan Place.

The Lorong Ah Soo 134 coffeeshop is leased by the joint venture company (JVCo) Jin Yuan 134 Food House.

The JVCo was incorporated by Jin Xin Yuan on Nov 2, 2020, with an initial share capital of $100 comprising 100 ordinary shares. It is principally in the business of letting go and operating self-owned or leased food courts, coffeeshops and eating houses.

Under the agreement, the JVCo will be allotting 147,000 ordinary shares to Kimly Makan Place and 152,900 to Jin Xin Yuan at a consideration of $147,000 and $152,900 respectively.

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After which, Kimly Makan Place and Jin Xin Yuan will hold a 49% and 51% equity stake respectively in the JVCo.

The board of directors of the JVCo will have two directors – one each from Kimly Makan Place and Jin Xin Yuan.

As the lease for the coffeeshop was originally held by Jin Xin Yuan, the JVCo has entered into a new lease with HDB for the same coffeeshop.

Jin Xin Yuan is a private Singapore-incorporated company with an issued and paid-up share capital of $50,000 with 50,000 ordinary shares.

Its shareholders are Choo Kim Chuan and Chuah Kiang Wen who hold 27,500 and 12,500 shares respectively. Together, the total number of shares held by Choo and Chuah make up 80% of the stake in Jin Xin Yuan.

The remaining 20% are each held by Loh Siaw Yin and Arsina Lim Giok Tin who hold 5,000 shares each.

Jin Xin Yuan is primarily in the business of letting and operating self-owned or leased food courts, coffeeshops and eating houses.

Its directors are Chuah and Lim.

Kimly says its rationale for the JV is in line with its strategy to expand its network of food outlets in Singapore and to establish new food outlets and food stalls as and when suitable.

It expects to further open more food stalls under its food retail division, complemented by its newly expanded central kitchen.

Apart from the additional sum injected into the JVCo, Kimly Makan Place has paid Jin Xin Yuan a lease assignment fee of $588,000. The fee took into factors including the market rent for comparable leases based on location, size and current rent paid.

The total consideration of $735,000 has been paid for in cash through the use of net proceeds from Kimly’s IPO.

Shares in Kimly closed 0.5 cent higher or 1.5% up at 33.5 cents on Jan 21.