After recycled metal, it's food next for Novena

By Lee Su Shyan
Jan 30, 2004
The Straits Times

NEW HORIZONS

HAVING ventured into beauty products and metal recycling, furniture retailer Novena Holdings now wants to open fast-food outlets.

The company's deputy chairman and chief executive (CEO), Mr Toh Soon Huat, said yesterday: 'We intend to go into the fast-food business in Singapore. We are talking to many parties. We will set up a few outlets first.'

The plan is to invest a couple of million dollars.

The food business will fall under the consumer lifestyle business of the Sesdaq-listed firm's operations, which already include home furnishings and retail of beauty products. These beauty products are sold at Leewah Essentials and NC Essentials shops.

The company's fast-food plans were unveiled yesterday as Mr Toh announced a one-for-one share swap in which Novena will take a 56.1-per-cent stake in Sesdaq-listed metal recycler Green World.

Together with an existing 11.7-per-cent stake, the move will increase Novena's holding in Green World to 67.8 per cent.

By taking over Green World, Novena is now making environmental management a major part of its business in addition to consumer lifestyle.

Once the deal is completed, Novena will then make a general offer for the remaining shares. Green World shareholders will be offered either 32.5 cents in cash per share or one Novena share.

Novena shares last traded at 37.5 cents and the Green World stock closed at 33.5 cents before shares in both counters were suspended yesterday ahead of the announcement of the deal.

Mr Toh explained the rationale for the move: 'We can work together. They have contacts in China, so do we. We feel we can grow much faster if we diversify to other areas like environmental management.'

Pooling the two companies' resources will help the group reach its vision of raking in revenues of $500 million a year by 2008.

Green World posted a net profit of $1 million on a turnover of $173 million for the year ended Feb 28, while Novena made a $1-million net profit on a turnover of $50 million for the year ended Dec 31, 2002.

Green World CEO Richard Lim said: 'Environmental management has lots of potential with growing awareness globally. Other than expanding recycling operations in the region, we will also look at moving into waste water management.'