SYDNEY, AUSTRALIA: Jatcorp Limited has decided to dispose of the 50% owned subsidiaries KTPD Holding Pty Ltd and Green Forest International Pty Ltd for nominal consideration.
Jatcorp acquired the subsidiaries in May 2018. The previous Board had made the decision to acquire the subsidiaries to boost sales and develop the distribution and sales channels.
However, KTPD Holding and Green Forest International did not perform as well as expected. For example, the subsidiaries have made net losses of $575K, $797K, and $1.5m for the financial year of 2020, 2021 and 2022 respectively.
As a result of the underperformed businesses, Jatcorp has previously impaired the investment of $7.6m and loan of $1.5m to the Subsidiaries made under the previous Board management to nil.
As a result of the disposal, Jatcorp will have no further liability to fund the operations of the subsidiaries going forward, and will not have to account for losses they make. This will have a net positive impact on the financial report.
The sale is to the remaining shareholder of KTPD Holding and Green Forest International, who will own 100% of their shares following the disposal. The remaining shareholder is not a related party.
Managing Director of Jatcorp, Mr Jack Wang, said: “As a part of our new strategy, Jatcorp management is focusing on creating value for shareholders and optimizing our investment portfolio. Disposal of unprofitable investments will help us to achieve this goal.”