HRC World PLC: CHANGE IN OPERATING STRUCTURE
July 30 2018 - 7:18AM
HRC WORLD PLC
NASDAQ FIRST NORTH,
COPENHAGEN
TICKER: HRC
ISIN: GB00BZ3CDY20
30 JULY 2018
CHANGE IN
OPERATING STRUCTURE
HRC World Plc (the Company), is
involved in establishing Hard Rock Cafés across China, today
announces that it is planning to further enhance its operating
structure to accommodate the available opportunities in business
expansion in China.
In the past several months, the
board has been actively exploring new business opportunities in
China and Hong Kong. The Company has identified two potential
opportunities in the themed restaurant and/or music entertainment
segment. The opportunities have a combined number of outlets
numbering more than 500. This present a huge immediate opportunity
to the Company which it wishes to pursue.
However, the current operating
structure of the Company is unable to accommodate this proposed
expansion into other F&B brands. This is because the current
structure includes:
-
Non-compete restrictions for the Company, as an
indirect shareholder of the current franchisee, from having any
interest or involvement in any other themed restaurant or music
entertainment;
-
Prohibitive conditions on shareholding changes
including probity checks by the franchisor (due to the gaming
regulation under which the franchisor operates) before approving
the shareholders' ability to exercise their rights.
In line with the aspiration of the
Company to become a leading themed-restaurant and music
entertainment operator in the region, the Company has decided to
implement certain changes to enhance its operating structure
specifically to allow the company to undertake the potential
opportunities mentioned above.
Accordingly, the Company has
entered into a Share Sale Agreement, which was approved by the
Stamp Office on 30 July 2018, with Ada Ventures, the original
founder of the franchisee of Hard Rock franchise in China, for the
sale of HRC Asia Ltd. The consideration receivable by the Company
under this agreement is USD20mil. HRC Asia Ltd is the company that
owns the existing Hard Rock Cafes in China. The sale will be tabled
for shareholder approval in the Company's Annual General Meeting on
the 23 Aug 2018. Subject to that approval being granted, the
agreement will become effective on the same day.
Separately, the Company has agreed
to enter into a Restaurant Management Agreement (RMA) with HRC Asia
Ltd, which shall be effective within 30-days after 23 August 2018,
for the management of the Hard Rock Café expansion, development and
operations across China and in additional territories as planned
earlier. The RMA essentially maintains the involvement of the
Company in the Hard Rock Cafés in China but on a management as
opposed to ownership basis. The RMA provides for the Company to
make available (1) restaurant marketing and promotion support
services, (2) tourist based customer acquisition services, and (3)
music & event based revenue development. The Company will not
be involved in the day-to-day operations of the restaurants engaged
under the RMA and further relieves the company of the capex
requirements for new cafes.
The directors believe that this is
a more inclusive approach of the Company's overall aspiration
of developing tourist-based and event-based revenues in all future
restaurants that the Company plans to manage and it will reduce the
Company's dependence on any single brand. In addition, this bodes
well with the Company's HRC Music initiative that has been in the
works in the last few months.
THE DIRECTORS OF
HRC WORLD PLC ACCEPT RESPONSIBILITY FOR THIS ANNOUNCEMENT
About HRC World
Plc
HRC World Plc is an England & Wales incorporated public company
with registration number 10829936 and is quoted on Nasdaq First
North (Copenhagen). HRC World through its subsidiaries manages Hard
Rock Cafés across China.
Further information may be found
at the Company's website: www.hrcplc.co.uk
Company contact details
HRC World Plc
+603 7786 0500
info@hrcplc.co.uk
Certified Adviser
Keswick Global AG
info@keswickglobal.com
+43 1 740 408045
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: HRC World PLC via Globenewswire
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