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Fabchem China's acquisition target was loss-making, says company in response to SGX queries
MAINBOARD-LISTED Fabchem China's identified target company for acquisition has had declining bottom lines over the past three years, with the latest being A$1.4 million (S$973,070) in the red.
In a statement responding to bourse regulator's queries on Wednesday, Fabchem revealed key financials of Australian power plant operator Renewable Power Management for 2018 to 2020.
The financial results showed the company had an audited net profit of A$1.67 million for FY2018, but the unaudited bottom line declined to A$621,000 last year, and slipped into a loss of A$1.4 million for the year to June.
Fabchem said revenue of Renewable Power Management had been affected by Covid-19 measures such as movement restriction controls and the partial lock-down across Australia, thereby affecting the company's supply of fuel and power production.
Fabchem's proposed acquisition of the company would result in a reverse takeover should the acquisition go through.
On the disposal of its unit in China that produces and sells commercial explosive products, Shandong Yinguang Technology, for between S$15 million and S$20 million, Fabchem said that an independent valuation on the main product put the unit within the range of the asking price.
The watch-listed Fabchem closed flat at S$0.15 on Wednesday.