Amtek’s proposed Crocodile brand disposal gets independent adviser nod

Amtek Holdings Bhd’s proposed disposal of its non-profitable retail business has been deemed fair and reasonable and not detrimental to shareholders of Amtek, by independent adviser Sierac Corporate Advisers Sdn Bhd.

Sierac recommended Amtek shareholders vote in favour of the proposal sale, Amtek’s exchange filing yesterday noted.

In January this year, Amtek’s indirect wholly-owned subsidiary, Apparel International Sdn Bhd, entered into a conditional sale and purchase agreement with Crocodile International Sdn Bhd (CISB) to sell its entire inventories of the “Crocodile” brand apparel and accessories, and retail fixed assets to the latter as well as the termination of the license agreement for distributing and retailing the brand’s men’s apparel and small leather goods in Malaysia for RM8 million.

Sierac noted Amtek has been incurring consecutive operating losses for the financial years ending June 30, 2015 (FY15) to FY17 due to cautious household spending and a challenging operating environment, and is also expecting to continue incurring losses in view of shrinking disposable income due to higher living costs and tighter consumer credit.

The proposed disposal would allow the group to cease its retail business and potentially reduce further losses, while the cash proceeds from the disposal of about RM5.6 million would allow it to reduce bank borrowings and repay creditors.

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