Meta Health Limited has disposed of MCE Technologies (Suzhou) or MCE Suzhou, its Suzhou metal business, to Jiangsu TNS Industry Science & Technology for a cash consideration of RMB17.2 million ($3.3 million).
MCE Technologies, a wholly-owned subsidiary of Meta Health 5DX , had entered into an equity transfer agreement with Jiangsu TNS on Nov 20. MCE Suzhou is a wholly-owned subsidiary of MCE Technologies.
The equity transfer agreement will also see the waiver and transfer of some RMB30.7 million of debt owed by MCE Suzhou to MCE Holdings and other members of the group to Jiangsu TNS. It will also see the waiver of RMB305,589 of debt owed to MCE Suzhou by some members of the group.
Meta Health, which is now in the healthcare technology and services sector, was formerly known as Metal Component Engineering, which focused on mechanical manufacturing solutions. The company proposed its name change at an extraordinary general meeting (EGM) held in January 2022.
According to Meta Health, the proposed transactions will allow it to exit from its loss-making metal business completely. The company recently completed the disposal of its other wholly-owned operating subsidiaries in the metal business in Malaysia and Thailand, MCE Technologies Sdn Bhd and MCT Thailand Co. Ltd., in November this year.
The proposed transactions will also allow the company to exit from its investment in MCE Suzhou at a lower cost than winding the latter up.
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The company adds that its metal business operations were severely affected by the impact of the Covid-19 pandemic on the economy. In the FY2022 ended Dec 31, 2022, Meta Health recorded a 21.5% y-o-y decline in its revenue of $33.8 million mainly due to a decline in revenue for its metal business, which fell by 23.7% y-o-y. In particular, total revenue from MCE Suzhou decreased by 24.2% y-o-y $13.5 million in FY2022, and recorded a loss of $0.7 million in FY2022 as compared to a profit of $0.5 million in FY2021.
More headwinds were faced in the 1HFY2023 ended June 30, which “consequently had an adverse effect on [Meta Health’s] financial condition and operating results”.
Furthermore, the proposed transactions will allow the company to deploy more resources to focus on growing and developing its healthcare portfolio in line with its diversification into the healthcare technology and services sector.
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Upon the completion of the proposed transaction, Meta Health will net RMB1.1 million or $203,128 in proceeds, which will be used for general corporate and working capital purposes.
Shares in Meta Health opened 0.1 cent higher or 12.5% up at 0.9 cents on Nov 21.
