KUALA LUMPUR: MST Golf Group Bhd has entered into a shareholders' agreement with its directors and major shareholders, Ng Yap Sio and Low Kok Poh, to establish a new subsidiary in Thailand as part of its regional expansion drive.
In a filing with Bursa Malaysia, it said the agreement, signed on Oct 23, covers the incorporation of MST Golf (Thailand) Co Ltd, which will focus on the retail sale of golf equipment, accessories, apparel and related services.
"The agreement is to govern the relationship between the parties as shareholders of MST Thailand and in regard to their management of MST Thailand and its business as retailer of golf equipment and related products," it said.
Under the arrangement, MST Golf Group Bhd will hold 999,998 ordinary shares, while Ng and Low will each hold one share.
MST Thailand has a registered capital of THB100 million (RM13.62 million), of which THB25 million (RM3.41 million) has been paid up to date.
MST Golf said the incorporation and operations of the new subsidiary will be fully funded through proceeds from its initial public offering (IPO).
The company described the move as aligned with its growth strategy to strengthen its regional presence.
"In accordance with the expansion plan for Thailand as stated in the company's prospectus for IPO of shares published on June 28, 2023, the company intended to open six retail outlets in Thailand," it said.
On risks, MST Golf said potential challenges in Thailand mirror those faced in its existing markets including foreign exchange fluctuations, supply chain issues, regulatory compliance and competition.
The company said it will mitigate these risks through sound business strategies and rigorous oversight of retail operations.
It added that the transaction will not have a material effect on its earnings, net assets, gearing or share capital for the financial year ending Dec 31, 2025.
"Thailand is a significant and vibrant golf destination in Southeast Asia, attracting both a strong domestic player base and substantial international golf tourism.
"The proposed establishment of the new company would allow the group to aggressively expand its retail footprint and strengthen its position as a major golf and lifestyle retailer in the region," it said.