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Acquisition Of Paddyfields Restaurant And Plans To Open New Restaurants Before End Of Financial Year 2001

BackFeb 02, 2001

The Board of Directors of Tung Lok Restaurants (2000) Ltd ("Tung Lok" or "the Company") is pleased to announce that its wholly-owned subsidiary, Tung Lok Millennium Pte Ltd ("TLM") has entered into a sale and purchase agreement ("the Agreement") with Jazz Point Pte Ltd ("the Vendor") to acquire the business of "Paddyfields Real Thai Food" ("the restaurant business").

Pursuant to the Agreement, TLM will acquire the restaurant business as a going concern and all the property, assets and rights of the Vendor used in the conduct of the restaurant business.

The acquired restaurant business will be re-conceptualised and re-launched as "Paddyfields Restaurant & Bar", offering Royal-Thai cuisine. The restaurant which is located at the Anchorage, Alexandra Road, seats 150 persons. It is the first acquisition by Tung Lok since its listing on the SGX-SESDAQ in March 2001.

The purchase consideration of $320,000/- which will be financed from Tung Lok's internal resources and borrowing from financial institution, was arrived at on a willing buyer and willing seller basis. The net book value of the restaurant business acquired is $146,181/-.

The acquisition is not expected to have any material effect on the net tangible assets and earnings per share of the Company for the current financial year ending 31 December 2001.

None of the directors or substantial shareholders of the Company has any interest, direct or indirect in the above transaction, save their shareholdings in the Company.

The acquisition is part of a strategy by Tung Lok to open five new restaurants by the end of the financial year ending 31 December 2001. Under this expansion plan, the number of restaurants within the Group will increase to 19 from the current 14. This is in addition to the Teahouse which was recently opened at China Square. The expansion will be carried out through a combination of opening new restaurants, acquisition of existing restaurants and entering of joint ventures.

As the bulk of the expansion programme is being carried out in the second half of the current financial year, the new restaurants are expected to contribute positively to the Group turnover and profitability from Financial Year 2002.