A WHOLLY owned Singapore subsidiary of Catalist-listed Kimly on Friday (Sep 9) agreed to sell its confectionery business Rive Gauche Pâtisserie to Muginoho Global for a consideration of S$2.8 million.

Rive Gauche Pâtisserie operates western pastry and confectionery specialty shops, including through online platforms. Muginoho Global is engaged in the manufacturing and sale of food products and is wholly owned by Japan-based Muginoho Holdings.

Kimly said the disposal will streamline its business operations and better direct resources to its core business of operating coffeeshops, including the opening of more outlets and diversifying its product offerings.

The assets of the confectionery business had a book value of S$218,804, based on the audited accounts of Kimly subsidiary Kimly Food Products, for the financial year ended Sep 30, 2021. The net profit attributable to the assets for FY2021 was S$424,044.

In addition to the purchase price, Muginoho Global will pay Kimly Food Products a cash amount equivalent to the aggregate daily cash float of the confectionery business, and the existing security deposits held with the landlords of premises leased by Kimly Food Products.

Kimly said S$1.8 million will be placed in escrow and disbursed according to payment milestones, based on regulatory approvals for the transfer of licences.

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Shares in Kimly closed flat at S$0.355 on Friday.