Kimly’s wholly-owned subsidiary Kimly Food Products has entered into a business transfer agreement with Muginoho Global for the disposal of its confectionary business, Rive Gauche Pattisserie.
The consideration for the confectionary business’ assets is $2.8 million. Additionally, Muginoho will make payment to Kimly Food Products of an amount in cash equivalent to the aggregate daily cash float of the confectionary business as well as existing security deposits held with the landlords of the premises which are leased to operate the business.
In a filing, the company said the purchase price was arrived at on a willing buyer and willing seller basis after arm's length negotiations between Kimly Food Products and Muginoho — taking into account the prevailing market conditions and the business prospects of the confectionary business, among others.
Based on the Kimly Food Product’s audited accounts for the financial year ended Sept 30, 2021 the book value of the assets stood at $218,804 while the net profits attributable to the assets stood at $424,044. The purchase price represents a $2,581,196 excess over the book value of the assets and the gain on disposal.
Kimly said the proposed transaction is intended to streamline its business operations and better utilise resources to the benefit of the core business as well as diversifying its product offerings.
The proceeds from the proposed transaction will be used as general working capital of the group and would further strengthen its balance sheet, enhance financial flexibility and facilitate any future plans to enhance shareholder value.
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Shares in Kimly closed at an unchanged 35.5 cents on Sept 9.
