SHAREHOLDERS of Soup Restaurant yesterday voted through a deal to sell its controlling share in roast duck chain Dian Xiao Er to the chain's founders, closing the book on a two-year dispute.
Soup Restaurant will get about $7.9 million from Mr Samuel Yik Kuen Koon and his wife Eliza Gunawan in exchange for its 50.98 per cent stake in YES F&B Group, which runs Dian Xiao Er.
Soup will reap a handsome return of about 40 times its initial $197,000 investment in Dian Xiao Er in 2006, it had said in a statement in April.
The $7.9 million sum was based on an independent valuation commissioned by Soup, which put the total value of YES at $15.5 million.
Mr Yik and Madam Gunawan now own the whole of YES. They had sued Soup for "minority oppression" in March, citing Mr Yik's removal as YES' managing director in 2010 and Madam Gunawan's subsequent resignation as its director.
But the trial was adjourned on its first day in April as both parties negotiated a settlement instead.
After an extraordinary general meeting held at Soup's Kampong Ampat office yesterday, managing director Mok Yip Peng told reporters the firm planned to move into other market segments.
It aims to open another chain selling food priced at $10 to $12 a head, catering to heartlanders, he said, noting that consumers were tightening their belts amid the economic downturn. He said these new restaurants would still be located in malls.
He also reiterated the firm's plans to expand in Malaysia and export its sauces, such as its samsui ginger sauce.
The firm had told shareholders at its annual general meeting in April that it would take these steps to make up for the revenue erosion from its sale of its Dian Xiao Er stake.
Revenue from YES made up 43 per cent of Soup's revenue and 28 per cent of its net profit last year, the group said in April.
Soup's executive director Then Khek Koon said building an extra cash reserve would make Soup more flexible and help it secure space in good malls in Malaysia. It runs one outlet in Kuala Lumpur and plans to open another.
Mr Mok also said Soup Restaurant would expand its central food processing unit soon to export sauces to markets such as Japan and Taiwan.
Executive director Wong Chi Keong added that Soup wanted to promote and preserve local heritage brands, many of which do not have "any second or third generation interested in taking over the business".
Mr Then said Soup was "prepared to work with people who are prepared to pass it on".
Soup yesterday posted a 2 per cent drop in net profit to $1.1 million for the half year compared with the corresponding period a year earlier. Revenue for the six months to June 30 grew 7.9 per cent to $31.1 million.
It declared a 0.35 cent dividend per share payable on Aug 31.
The counter closed 0.1 cent higher at 12.8 cents yesterday.