Caring Pharmacy Retail Management Sdn Bhd, a 75 per cent-owned subsidiary of 7-Eleven Malaysia Holdings Bhd (SEM), recently signed a joint-venture agreement to establish a pharmaceutical business to distribute and administer pharmaceutical products in Indonesia.
The 28.98 billion rupiah (RM8.55 million) deal, according to the group, represents an opportunity for SEM to enter the Indonesian pharmaceutical industry.
The JV agreement with PT Era Prima Indonesia, according to the company, contains two proposals that are inter-conditional upon each other and are expected to be completed in the first half of 2022.
The first proposal is a shareholders’ agreement between Caring and Era Prima to facilitate the formation of PT Era Caring Indonesia, a distribution company. Caring will own 50.1 per cent of the distribution company.
The second proposal is for Era Prima and its 98.46 per cent-owned subsidiary, PT Era Farma Indonesia (EFI), to enter into a mandatory convertible bond subscription agreement for a proposed cash subscription of 23.95 billion rupiah (RM7.07 million) in unsecured mandatory convertible interest-bearing bonds.
EFI will then operate in Indonesia as a retail company under the “Wellings” brand.
Caring and Era Prima will enter into two additional agreements after completing the bond subscription.
The first additional agreement will be a governance agreement between Caring, Era Prima, and EFI, which will go into effect to regulate Caring’s and Era Prima’s relationship in terms of EFI management.
The second agreement will be a trademark licence agreement between Caring’s subsidiary Wellings Pharmacy Sdn Bhd as the licensor and EFI and Era Prima as licensees, allowing both Indonesian counterparties to use the “Wellings” trademark in their branding and business conduct for a nominal licence fee of 50 million rupiah (RM15,000).
As of end November, 7-Eleven Malaysia’s market capitalisation was around RM1.85 billion.