ISLAMABAD/ KARACHI: After opening Golden Chick restaurants in Pakistan under a master franchise rights agreement with US-based Golden Franchising Corporation, Crescent Star Foods has signed a similar agreement with the American company to open 42 stores in six countries of the Gulf region.
According to a securities report filed by its holding company Crescent Star Insurance on Monday, Crescent Star Foods now holds master franchise rights for Golden Chick stores in the United Arab Emirates, Kuwait, Qatar, Oman, Bahrain and Saudi Arabia.
PICIC, Crescent Star Insurance deal back on track
Crescent Star Insurance is a relatively small insurance company in terms of its gross premiums (Rs266 million). It owns 100% shares in Crescent Star Foods. Golden Chick is a fast-food chain headquartered in Dallas, Texas, with presence in many Asian and South American countries.
With almost 1.5 million shares changing hands, the stock price of Crescent Star Insurance gained over 9.2% to reach Rs11.80 a share on Monday.
The company intends to open its first Gulf restaurant in 2017, the securities filing said.
The Pakistani food entity joined hands with the American firm last August to roll out 30 food outlets in the next 10 years in different cities of Pakistan.
In its detailed financial accounts, Crescent Star Insurance said the local business of its foods subsidiary will become commercially viable during the current year while it is expected to start paying returns from 2017.
With an expanding middle class, the country’s fast-food market has grown in recent years. Many new entrants, like Burger King, Hardee’s, Johnny Rockets and Fat Burger have grabbed a share in the fast-food segment in Pakistan.
According to Al Shaheer Corporation, a prominent meat exporter and retailer, Pakistanis consume about 834,000 tons of poultry meat every year, which makes the nation one of the top 20 consumers of chicken globally.
In the annual general meeting of Crescent Star Insurance last April, the company resolved to authorise investments in the share capital of Crescent Star Foods up to Rs50 million, which enhanced its total investment in the subsidiary up to Rs120 million in aggregate.
The period of investment is long term, it said, with the objective of entering the “lucrative food business category.”
Golden Chick Restaurants preparing to land in Pakistan
Crescent Star Insurance has been on an expansion spree of late. It has invested up to Rs50 million in Pak Kuwait Takaful Company besides investing up to Rs450 million in Dost Steels by underwriting the steel manufacturer’s shares.
It is also acquiring PICIC Insurance at the swap ratio of one to four ie any person or institution holding four shares in PICIC Insurance will end up owning one share in Crescent Star Insurance post-acquisition.
Published in The Express Tribune, July 19th, 2016.
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