Alca Vstyle Sdn. Bhd, the 34%-owned associated company of SGX-listed Versalink, has entered into a business sale agreement with Max World Idzign Sdn. Bhd. for the proposed sale of its assets.
Max World Idzign Sdn. Bhd. is in the business of trading in furniture boards and related materials, transportation services and trading in tooling and machinery and related products.
The agreement was entered into on Oct 1.
Under the agreement, Max World Idzign will purchase all equipment, furniture and vehicles owned by Alca Vstyle as at July 31, as well as all of its stocks for a total consideration of RM3.5 million ($1.08 million). The sum is subject to adjustments to be determined on or before Oct 26
The total consideration was arrived at based on arm’s length negotiations between the parties after taking into account the net value of the assets and the valuation of the stocks located at Kampung Baru Sungai Buloh 47000 Sungai Buloh Selangor.
The consideration is subject to adjustments based on the valuation of the stocks. Should the total valuation exceed RM3.2 million, an upward adjustment will be made and vice versa.
See also: Sembcorp issues $350 mil of guaranteed notes due 2036 at 3.65%
A deposit of RM800,000 has been paid on Oct 1. The balance of RM2.7 million will be paid to Alca Vstyle’s solicitors as stakeholders in six monthly payments, with RM450,000 per monthly installment.
According to Versalink, the shareholders of Alca Vstyle believe that the business’ operating environment is expected to remain challenging due to several factors including the rising interest rates and uncertain macroeconomic environment.
To this end, Alca Vstyle’s shareholders see that the proposed sale represents a good opportunity for them to dispose a loss-making business and realise the value of the assets at a satisfactory consideration.
The proposed sale is in relation to the disposal of a non-core asset of the group and is not expected to have any material impact on the group’s risk profile and core business.
Based on Alca Vstyle’s latest available audited financial statements for the FY2022 ended Feb 28, its audited net loss after tax was approximately RM466,000. Its audited net liability value and net tangible liability value as at Feb 28 was approximately RM1.6 million.
Assuming that Versalink will receive RM1.2 million from Alca Vstyle upon completion of the proposed sale to fully settle the outstanding amount owing by the latter to the former, and after deducting estimated expenses in connection with the proposed sale of approximately RM50,000, Versalink will record a net gain on the sale of approximately RM371,000.
As at 2.04pm, shares in Versalink are trading flat at 10.8 cents.
