Merchant House International to Cease Operations at AMI Textile Factory in USA
MERCHANT HOUSE INTERNATIONAL LIMITED (MHI) Share Update August 2024 Monday 5th
Merchant House International Announces Closure of AMI Textile Operations in USA
Merchant House International Limited (ASX: MHI) has announced the permanent closure of its American Merchant Inc textile factory in the USA, following continued financial losses.
Instant Summary:
- Permanent closure of AMI textile factory in the USA.
- Factory recorded a loss of A$3.7 million for the year ended 31 March 2024.
- Closure to occur in September 2024.
- Company plans to sell land, buildings, and equipment.
- Potential voluntary delisting from ASX and distribution of net funds to shareholders.
Closure Announcement
Merchant House International Limited has decided to permanently cease operations at its American Merchant Inc textile factory in the USA. This decision comes after the factory recorded a significant loss of A$3.7 million for the year ended 31 March 2024 and continued to sustain losses.
The closure is scheduled to take place in September 2024. The company plans to dispose of the land, buildings, and equipment associated with the business. However, no estimates can be made at this stage regarding the timing or proceeds from the sales. The company will approach other major textile manufacturers to identify potential purchasers for these assets.
Future Plans
Following the sale of the assets, Merchant House International intends to seek a voluntary delisting from the ASX. The company will also seek approval from shareholders to distribute the net funds held by the company at that time to shareholders, followed by the winding up of the company.
The board will continue to advise the market as further information becomes available. This announcement was authorized for issue by the Board of the Company, with David McArthur, Company Secretary, overseeing the communication.
The closure of the AMI textile factory is a significant development for Merchant House International. The continued financial losses have forced the company to take drastic measures, including the sale of assets and potential delisting from the ASX. This move could impact the company's stock price as investors react to the news.
The distribution of net funds to shareholders may provide some relief, but the overall market sentiment could be affected by the winding up of the company. Investors should closely monitor the company's future announcements for more details on the asset sales and potential delisting.
Investor Reaction:
Analysts are likely to have mixed reactions to this announcement. While the closure and asset sales may be seen as necessary steps to mitigate further losses, the potential delisting and winding up of the company could raise concerns among investors. The distribution of net funds to shareholders may be viewed positively, but the overall impact on the stock price remains uncertain.
Conclusion:
Investors should keep a close eye on Merchant House International's future announcements regarding the sale of assets and potential delisting from the ASX. The company's strategic decisions in the coming months will be crucial in determining the long-term impact on their portfolios. Stay informed and consider subscribing to our newsletter for regular updates and in-depth analysis.