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Ted Baker To Form JV To Expand Brand To Mainland China, Hong Kong, Macau Markets

Ted Baker Plc (TED.L), a lifestyle brand, announced Wednesday that it entered into an agreement with Shanghai LongShang Trading Company Ltd. or LS to create a Joint Venture in Mainland China, Hong Kong and Macau aiming to expand Ted Baker brand.

The new joint venture will operate Ted Baker retail, concessions and online channels in these significant markets.

Ted Baker's net cash contribution in the JV is anticipated to be in the region of 30 million Chinese yuan or about 3.4 million pounds.

Under the JV agreement, Ted Baker will issue shares in the share capital of its wholly owned subsidiary Ted Baker Hong Kong or TBHK to the JV Partner for a total subscription price of 50 million Chinese yuan or about 5.7 million pounds, in return for a 50% interest in the shares in TBHK.

As a result of this, the company anticipates transaction related costs at completion of approximately 6.5 million pounds. The joint venture is expected to be marginally enhancing to Ted Baker's Group profit before tax in the current financial year.

LS will assign its rights under the JV to a newly incorporated Hong Kong investment vehicle to be wholly owned and formed by LongGoal Holdings Co Limited and Infra-Apparel Group Pte Ltd.

The JV is conditional on approval from three Chinese governmental authorities, being NDRC, MOFCOM and SAFE. The Company anticipates receiving regulatory approvals before August 31.

The JV will have six directors, evenly split between Ted Baker and the JV Partner. The JV is expected to break-even in the 2021/22 financial year.

In London, Ted Baker shares were trading at 1,495 pence, up 1.70 percent.

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