SYDNEY, AUSTRALIA: Merchant House International Limited (ASX: MHI) advised that due to the changing business environment in China, the Board of its associate company Tianjin Jiahua Footwear Company Limited has decided to cease production operations with immediate effect.
Forsan Limited, a subsidiary of MHI, holds a 30% interest in Jiahua. The decision by the board of Jiahua to cease operations follows a progressive decline in profits in recent years, as identified in the financial statements of MHI.
The land and buildings (100% interest) have an estimated market value of RMB 35 million (A$ 7.7 million), based upon recent comparable sales data in the surrounding area and subject to the deduction of any selling costs incurred.