Published November 17, 2012

Kitchen Culture exits property plan

By ong chor hao

KITCHEN Culture Holdings will not be making a move into property after all.

Yesterday, the Catalist-listed firm told the Singapore Exchange (SGX) that it has terminated a memorandum of understanding (MOU) with an "unrelated third party" for the establishment of a joint venture (JV) to enter the property market.

The JV was to engage in an en bloc sale and high-end residential redevelopment project that involves buying en bloc properties for about $92.2 million.

It was part of Kitchen Culture's plan announced on Sept 19 to diversify its business beyond its current scope as a high-end kitchen supplier to include property development, investment and trading.

The diversification plan was scrapped yesterday.

"The company does not intend to proceed with the proposed diversification at this juncture," it told the SGX.

It did not provide a reason behind the move.

Kitchen Culture had said the diversification would create new engines of growth and cut its dependence on its core business, which deals with the sale and distribution of kitchen systems and appliances, wardrobe systems, household furniture and accessories.

Entry into the property market was also seen as complementary to its main operations.

"The group can leverage on its network of contacts in the property development industry for the proposed new business. Further, the group is expected to have a competitive edge in securing contracts for the supply of kitchen systems to the property development projects undertaken by the group in the future," it said then.

Kitchen Culture had expected to hold a 20 per cent stake in the JV, with the remaining interest to be held by five unrelated parties, including its JV partner, it said in its September filing.

On Nov 2, it decided to acquire just a 15 per cent stake, with the five other original parties involved taking up the rest.

As part of the MOU, Kitchen Culture had agreed to pay a deposit of about $1.66 million to its JV partner to take part in the venture.

That amount has been refunded and both parties have been released from their obligations, the company said yesterday.

Shares in Kitchen Culture were last traded at 25 cents.