Multistack International Limited has announced plans to discontinue its current business operations due to sustained losses and capital constraints, with a strategic disposal of its Australian subsidiary underway.
- No chiller sales recorded in Q3 2025, only spare parts revenue
- Board decides to discontinue business in current form due to ongoing losses
- Plans to dispose of shares in Multistack Australia subject to approvals
- Cash position at $1.33 million with quarterly operating expenses of $220,605
- Company holds $696,000 unsecured loan from related party
A Challenging Quarter for Multistack International
Multistack International Limited (ASX – MSI), a player in the HVAC equipment sector, has revealed a sobering update in its September 2025 quarterly report. The company recorded no sales of its core product; water-cooled and air-cooled chillers; during the quarter, with revenue limited to spare parts sales. This lack of sales highlights the ongoing difficulties the company faces in sustaining its principal business activities.
Board Decision to Discontinue Current Business Model
In a decisive move announced earlier in June, the Board of Directors concluded that the business, as it currently operates, is no longer commercially viable. Persistent losses and the need for significant capital injections, which the company is unable to secure, have led to the decision to discontinue operations in their present form. This marks a pivotal strategic shift, signaling a potential end to Multistack’s existing business framework.
Plans for Disposal and Ongoing Operations
Looking ahead, Multistack intends to dispose of its shares in its Australian subsidiary, Multistack Australia. This process will require mutual agreement between involved parties, completion of formal documentation, shareholder approval, and possibly an independent expert’s report to comply with regulatory requirements. Despite these changes, the company will continue to operate prudently as a going concern and maintain compliance with ASX reporting obligations during the transition.
Financial Snapshot and Related Party Loans
At the end of the quarter, Multistack held $1.33 million in cash and equivalents, while quarterly operating expenses totaled $220,605. These expenses included $30,007 in trading and operating costs and $190,598 in staff, administration, and corporate overheads. Additionally, the company carries a non-interest bearing, unsecured loan of $696,000 from ACR Equipment (HK) Ltd, a related party, which adds another layer of financial complexity to its restructuring efforts.
Looking Forward
Multistack International’s announcement underscores the challenges faced by companies in capital-intensive industrial sectors when market conditions and internal constraints converge. The coming months will be critical as the company navigates shareholder approvals and the disposal process, with investors keenly watching for signs of recovery or further restructuring.
Bottom Line?
Multistack’s next moves on disposal and capital strategy will be crucial for its survival and investor confidence.
Questions in the middle?
- What are the terms and timeline for the disposal of Multistack Australia shares?
- How will the company manage its capital needs post-disposal?
- What impact will the related party loan have on future restructuring or refinancing options?