SINGAPORE -- The board of directors of Inno-Pacific Holdings Ltd. (IPH) wants to sell 69.5 million new ordinary shares of stock for S 1 cent (about U.S. 1/2 cent) each to use as working capital for its own operations and those of its Shakey's, Inc. subsidiary.
According to an Inno-Pacific news release on the Singapore Stock Exchange, the company anticipates the stock sale will yield S $2.3 million (U.S. $1.3 million).
Sixty-four store Shakey's, based in Garden Grove, Calif., will get S $500,000 (U.S. $289,000) of the proceeds, S $900,000 (U.S. $520,000) will be used for IPH's overhead expenses and S $300,000 (U.S. $173,400) will go to creditors. Another S $500,000 (U.S. $289,000) will be used for other businesses.
According to IPH documents filed with the stock exchange, Shakey's is IPH's lone revenue-producing subsidiary. Those funds come largely via royalties generated by the companies' franchisees.
Since IPH purchased Shakey's in 1989 both store numbers and royalties have dropped steadily.
Last December, a group of the pizza chain's franchisees filed a $20 million lawsuit filed against Shakey's accusing it of breach of contract, breach of the covenant of good faith and fair dealing, fraud and negligent misrepresentation (see related story Money woes, legal battles signal crisis for parent of Shakey's pizza chain).