South Korea’s catering and foodservice firm CJ Foodville announced on July 18 that it has secured 87.5 billion won ($74.3 million) from Chinese private equity firm Hosen Capital to further expand its bakery business in China.
The Korean company received the funds through establishing a joint venture, B&C Craft, with Hosen Capital in China. The Chinese firm has 72 percent stake in the JV while the CJ affiliate owns the rest by injecting 34 billion won.
The new JV will manage all of CJ’s bakery businesses in three cities of China -- Beijing, Shanghai and Zhejiang -- instead of the three separate existing independent units of Tous Les Jour.
The Korean company has been losing money in China from 2008, so it sees this as an opportunity to revive its business. Its accumulated losses from 2008 to 2017 reached 84 billion won and the number of Tous Les Jour outlets in China, which once reached more than 180, dropped to around 160.
“We haven’t been able to open a new outlet in China during the last few years,” a CJ Foodville spokesperson told The Investor. “Since we received new funds, we are planning to open new Tous Les Jour stores in China.”
The company also added that although the Chinese PEF owns more than 50 percent stake in the JV, the brand and rights to make important management decisions still belong to CJ Foodville. It added that since it can exercise its right of first refusal, it is also considering acquiring some additional stake in the JV.
By Song Seung-hyun (firstname.lastname@example.org)