The Malaysian company is set to dispose of its loss-making Chinese subsidiary Jadi Suzhou for RM20.3 million ($4.95 million/€4.34 million).
The disposal will include land measuring 191,502 square feet in Suzhou, China, and The Edge Markets forecasts that it will earn RM8.89 million ($2.16 million/€1.9 million) for Jadi.
The company has said that the disposal will allow it to “deconsolidate a loss-making business entity” and is part of a wider strategy to focus particularly on the manufacture and sale of resin toners.
“This will enable the group to better utilise its resources to generate profit and at the same time, eliminate further potential losses which might be incurred by Jadi Suzhou,” said Jadi in its filing. “The property’s divestiture will also allow the group to unlock and realise the value of the property and provide it with the additional resources to invest and grow its existing businesses.”
Jadi also revealed that proceeds from the sale would contribute to capital expenditure for the production of chemically-produced toner and working capital.
Two Chinese nationals, Xue Chengcai and Xu Xuehua, have entered into a conditional share sale agreement with Jadi.
“Barring any unforeseen circumstances, the proposed disposal is expected to be completed in the third quarter of 2018,” the company added.
In the last financial year, Jadi Suzhou recorded losses of ¥2.11 million ($306,538/€269,235), on revenue of ¥14.7 million ($2.13 million/€1.87 million).
