iX Biopharma to sell Chemical Analysis unit for A$12.5m
Vivienne Tay
Singapore
IX Biopharma has entered into an agreement with independent third party Eurofins Australia New Zealand Holding for the proposed disposal of its entire stake in its wholly owned subsidiary, Chemical Analysis, for A$12.5 million (S$12 million) in cash.
The company expects to receive net proceeds of about S$11.75 million from the sale, after deducting estimated expenses of about S$250,000.
The proceeds will be used to repay bank borrowings, for marketing the company's pharmaceutical and nutraceutical products, and scaling up its manufacturing capacity.
The consideration represents an excess of around S$10.60 million and S$10.84 million over the book value and the net tangible asset value (NTA) of the sale shares respectively, assuming there are no adjustments. The net gain on disposal is about S$10.4 million.
The company added that the business model of the laboratory testing business is "very labour intensive" as it derives fees for services rendered. Therefore, the disposal would allow the group to "better use or rationalise its resources" with the goal of achieving better returns for shareholders.
The sale will also provide the group with the funds to grow more strongly in its core business areas. It requires funding for the continuous development and the anticipation of commercialisation for its third quarter this year for its pharmaceutical and nutraceutical products.
The news comes one week after the company shared its unaudited financial statements for Q2 and the half year ended Dec 31, 2018.
Shares for iX Biopharma closed 23.81 per cent or five Singapore cents higher at S$0.26 on Monday.
