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By Samisoni Pareti

SUVA, Fiji (Islands Business, February) –After selling its supermarket chain in Tonga, long-time Pacific conglomerate Carpenters is doing the same in neighboring Samoa.

In a deal announced by the Malaysian Stock Exchange in Kuala Lumpur, parent company MBf Carpenters says it has sold its 88.5 percent equity in its Samoa supermarket chain, Morris Hedstrom, for 1.66 million Ringitts (US$436,899).

Behind the buyout is Frankie Company Ltd, a Samoa retailer owned by a Chinese-born businessman, Frankie Cai.

In deciding to sell its Samoa operation, Carpenters MBf (Pacific operation) is closing a chapter of being a leader in retail business in Polynesia.

With its withdrawal from Samoa and Tonga, Carpenters' business interest is now confined to Papua New Guinea and Fiji.

The group's financial controller, P L Munasinghe, in confirming the Samoa buyout, denied the conglomerate intends to pull out of the Pacific.

However, he said poor performance was the main cause of the decision to sell some of its interests in the Pacific, including in Samoa. "Morris Hedstrom Samoa (MHS) Limited has been under-performing and consistently failing to meet the investment criteria set by the parent company," Munasinghe told ISLANDS BUSINESS.

"The majority interest was sold to Frankie Company Limited after receiving a reasonable offer for the shares. The Tongan operation was also sold due to poor performance.

"Carpenters will now focus on consolidating and expanding its businesses in Fiji and Papua New Guinea.

"In recent times, large-scale property and business expansion investments have been made in both countries in support of these strategies."

According to Munasinghe, the group has not ruled out continued expansion, even a return to Polynesia.

"However, this does not preclude the group expanding into other South Pacific countries including Samoa and Tonga with a feasible business proposition at an appropriate time."

Cai, who owns a chain of supermarkets in Samoa trading under his first name of Frankies, declined to comment on the deal when contacted by ISLANDS BUSINESS.

"I have to decline an interview at this time but would be pleased to discuss the matter with you at a later date," he said.

"Please feel free to contact me again in a couple of months after all the dust has settled and I would be happy to give you an update at that time."

The sale was greeted with much delight in Samoa, given that Morris Hedstrom known to locals as Molisi is now fully Samoan owned.

Finance Minister and deputy Prime Minister Misa Telefoni described the new owner of Molisi as "an up and coming star" of the country's private sector.

"MH Samoa has been on sale for a while and Frankie bought it-a purely commercial transaction with a willing buyer/willing seller.

"It is good for the economy, still a lot of competition in the retail sector-good for consumers!"

Carpenters may list on the Suva-based South Pacific Stock Exchange (SPSE), but has ruled such a move out for now.

Carpenters MBf Limited, the parent company of the Carpenter Group in the South Pacific, is a public listed company in the Australian Stock Exchange.

"Some tentative enquiries have been made with the SPSE regarding a secondary listing of shares.

This is unlikely to happen any time soon as the current listing rules do not provide for secondary listings," Munasinghe said.

While welcoming the buyout, Samoa's Chamber of Commerce & Industry said Carpenters' withdrawal was not unexpected.

"Morris Hedstrom Samoa played a pivotal role in the development of Samoa's wholesale and retail trade.

The company has always been an important member of Samoa's business community," said Chamber president, Epa Tuioti.

The buyout by Frankies continues the latter's string of investments in wholesale/retail outlets and properties in Samoa over the past 12 months. The chamber believes Frankie's buyout will ensure the people of Samoa continue to be provided with the broadest range of quality consumer products, price competitiveness and excellent customer services which MHS had provided in the past years.

Following the official announcement of the change in ownership, Cai said there would be no job losses.

February 15, 2005

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