Merchant House Nets Over A$18 Million from AMI Asset Divestments
Merchant House International has completed the sale of its American Merchant, Inc. assets, generating significant profits and setting the stage for winding up operations and voluntary delisting from the ASX.
- AMI ceased operations in September 2024 after sustained losses
- Sale of AMI equipment and property yielded over A$18 million
- Profit of approximately A$3.5 million realised on land and buildings sale
- Company plans to wind up subsidiaries and distribute residual funds to shareholders
- ASX suspended MHI securities due to inadequate operations; delisting anticipated
Background and Asset Divestment
Merchant House International Limited (ASX – MHI) has officially closed the chapter on its American Merchant, Inc. (AMI) subsidiary, which ceased operations in September 2024 after enduring prolonged financial losses. The June 2025 quarter marked the completion of a strategic divestment process, with the sale of AMI’s manufacturing equipment and real estate assets generating substantial cash inflows and profits for the group.
In early 2025, MHI sold AMI’s equipment for US$4 million (approximately A$6.43 million), receiving full payment through a combination of upfront cash and promissory notes. Subsequently, the company sold the land and buildings in Virginia to Leclerc Foods Virginia LLC for over US$8 million (around A$12.3 million), realising a profit of approximately A$3.46 million above book value. A condominium asset was also sold at a profit, completing the divestment of all AMI assets.
Financial Position and Operational Status
Despite the cessation of AMI’s operations, Merchant House remains financially solvent with a robust cash balance of nearly A$26 million as of 30 June 2025. The company reported net operating cash outflows during the quarter, offset by significant proceeds from asset sales. Additionally, a government grant previously recorded as a liability was recognised as income after meeting required conditions, providing a further boost to the financial position.
Operationally, the group has begun the process of winding up its subsidiaries, with the board signalling intentions to distribute residual funds to shareholders. This move is contingent upon regulatory compliance, taxation advice, and shareholder approvals. The company has also appointed a new non-executive director, David McArthur, to oversee the final stages of this transition.
ASX Suspension and Future Outlook
In February 2025, the ASX suspended trading of MHI’s securities due to the company’s inadequate level of operations, breaching listing rules. Given the company’s plan to wind up and distribute remaining funds, reinstatement of securities quotation is not expected. The board has indicated that a voluntary delisting from the ASX and eventual winding up of the parent entity will follow the completion of these processes.
This strategic exit from active operations and the orderly wind-up reflect a pragmatic response to sustained losses and changing market conditions. For shareholders, the forthcoming distribution of residual funds represents a return of value, albeit after a lengthy period of operational challenges.
Bottom Line?
With AMI assets fully divested and wind-up underway, Merchant House’s next steps will focus on shareholder returns and formal delisting from the ASX.
Questions in the middle?
- What is the expected timeline for the completion of the wind-up and shareholder distributions?
- How will taxation and regulatory approvals impact the final returns to shareholders?
- Could there be any residual liabilities or contingencies that might affect the winding-up process?
