Envictus to sell loss-making sports nutrition unit to NZ food company

WATCH-LISTED Envictus International Holdings, which last year moved to close down its loss-making Texas Chicken operations in Indonesia, on Tuesday signed and disclosed a deal to sell off sports nutrition products subsidiary Naturalac Nutrition.

Naturalac Nutrition, which purveys its wares in Australia and New Zealand, will be sold for NZ$400,000 (S$355,000) to New Zealand-based dry powder blender and packer Hansells Masterton, under a conditional sale-and-purchase agreement.

The value of Naturalac Nutrition's inventory, the cost of all purchase orders that it does not hold at the completion date, and any goods and services tax, will all be added to the price tag too.

Envictus said in its bourse filing that it had planned to shut down the Naturalac Nutrition business, and would have written off the assets if they had not been sold.

"The proposed disposal therefore represents a good opportunity for the group to dispose of the assets of a loss-making business and obtain some consideration for it," the company said, adding that net proceeds will be used for working capital purposes.

It also disclosed that the loss from the planned sale comes up to about RM2.47 million (S$823,000). No independent valuation was done on the assets, which had a book value of RM6.93 million as at Sept 30, 2019.

The completion of the sale requires Envictus to get confirmation from the bourse, by the long-stop date in 30 days' time, that the transaction does not need shareholders' approval.

Envictus has also agreed not to carry out any similar business or compete in New Zealand and Australia for three years from the date that the deal is completed.