Merchant House International Finalises Tianjin Sale, Plans ASX Delisting
Merchant House International Limited reports the completion of its Tianjin asset sale and the cessation of AMI operations, signaling a strategic wind-up and delisting plan.
- Sale of 33.79% interest in Tianjin Tianxing Kesheng Leather Products completed
- AMI home textiles operations ceased with assets pending sale
- Company remains solvent with A$1.78 million cash reserves
- Plans underway for asset divestment, shareholder distribution, and voluntary ASX delisting
- Quarterly cash flow shows operating cash outflows amid asset sales
Forsan Asset Sale Finalised
Merchant House International Limited (ASX: MHI) has confirmed the completion of the sale of its 33.79% stake in Tianjin Tianxing Kesheng Leather Products Company Limited. The transaction, initially announced in May 2024, culminated in the receipt of approximately US$4.9 million in January 2025, marking a significant milestone in the company's divestment strategy. This sale effectively ends Forsan's involvement in the export of work boots and safety footwear from its Tianjin liaison office.
AMI Operations Cease Amid Long-Term Losses
In a parallel development, Merchant House International ceased operations of its AMI division, a designer and manufacturer of home textiles, by the end of September 2024. The decision follows sustained losses and reflects a strategic retreat from the 'Made in America' textile business. The company is actively seeking buyers for AMI's land, buildings, and equipment, although timing and expected proceeds remain uncertain.
Financial Position and Future Plans
Despite these operational closures, Merchant House International remains financially solvent with a cash balance of A$1.78 million as of 31 December 2024. The board has initiated preparations for the sale of remaining AMI assets and plans to seek shareholder approval for the distribution of residual funds. This process will be followed by a voluntary delisting from the ASX and the winding up of the group, signaling an orderly exit from its current business activities.
Cash Flow and Expenditure Highlights
The quarterly cash flow report reveals operating cash outflows of A$816,000, largely driven by AMI's closure costs and overheads. Payments to related parties, including director salaries, amounted to A$233,000 on normal commercial terms. The company reported minimal investing and financing activities during the quarter, reflecting its focus on asset divestment rather than expansion or capital raising.
Outlook and Market Implications
Merchant House International's transition from active operations to asset divestment and shareholder return marks a significant pivot. Investors will be watching closely for updates on the timing and proceeds of AMI asset sales, which will determine the pace and scale of shareholder distributions. The planned voluntary delisting underscores the company's intent to conclude its public company status, raising questions about the future of its remaining assets and any potential residual value.
Bottom Line?
Merchant House International is closing a chapter with asset sales and delisting plans, leaving investors to await the final returns.
Questions in the middle?
- What is the expected timeline and valuation for the sale of AMI’s remaining assets?
- How will the company structure the distribution of residual funds to shareholders?
- What risks remain in the winding-up process and potential liabilities?