A merry present for Union members

Just when you think NKF is leading the headlines, NTUC also must join in one leg and announce that US$12 million has gone down the drain as someone thought it may be a good idea to moderate the cost of living for low income households in China too.

*cough cough*, $$ hike fumes.

At least it would happen before the next GE.


(Extracted from website) FairPrice has grown to become the leading supermarket retailer in Singapore. It has a retail network of more than 100 stores island-wide. Owned by more than 450,000 Singaporeans, it serves the needs of more than a million everyday, and is indeed "Singapores Very Own" Its founding mission to help moderate the cost of living for low income households in Singapore remains at the heart of its operations. With sales of $1 billion in the last financial year......

FairPrice's China hypermart joint venture bows out

Rescue deal offered by FairPrice but parties couldn't agree on terms

(SINGAPORE) Nextmall, the China hypermarket venture of NTUC FairPrice, is shutting down after racking up nearly $80 million in debts and more than $40 million in losses over the three years since it was formed.

Nextmall's eight hypermarket properties are being sold, which should help with debt repayment.

NTUC FairPrice International is writing off the US$12 million it paid for its 33.7 per cent stake in Nextmall. DBS Nominees, understood to be representing DBS Private Equity, holds a similar stake.

The rest of Nextmall is held by China billionaire Liu Yonghao's New Hope Group, real estate developer Dahua, and Taiwanese entrepreneur Chang I-Chang, who owns the Apex group in Taiwan.

Nextmall provides merchandising, management and logistics services to China-incorporated hypermarket operator, Nextmart, for a fee.

'We went in as financial investors to get a feel of China, and secondly to establish our purchasing office in China, which we have done,' said FairPrice assistant general manager (investments) Victor Lim.

'We were not involved in the day-to-day operations of Nextmall which were done by a local management team. It overextended itself, developing too many hypermarkets in a short span of time. In addition, Nextmall also ventured into two mall developments.'

That was partly how Nextmall racked up its debts. Nextmall's management team is headed by Taiwanese Andrew Shen.

Nextmall owes suppliers $30 million; banks, including DBS's Shanghai branch, $40 million; and the developer of a Nanjing property, $6.6 million.

'FairPrice even offered a rescue package to assume the majority stake in Nextmall and take over the day-to-day running in order to reverse the losses, but we could not agree on the terms stipulated by the other shareholders,' said Mr Lim.

Nextmall owned the Nanjing store and took long term leases of about 15 to 20 years each for the other seven hypermarket stores and malls.

It has so far disposed of two stores to Carrefour - in Shanghai's Qipao district and in Nanjing. Nextmall has also assigned its long-term master lease in the mall where its Qipao hypermarket was located to Singapore's CapitaLand group.

Nextmall has also divested its hypermarket store in Yuyao in Zhejiang province. It is finalising a deal to find buyers to take over its master leases for a mall and store in Shanghai's Paoshan district and is in talks to sell three other hypermarket stores in Taizhuo, Shaoxing and Keqiao - all in Zhejiang.