Disposal of Korean Subsidiary and Related Party Transaction
23 December 2024
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) 596 / 2014 WHICH FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").
Haydale (AIM: HAYD), the global advanced materials group, confirms that it
has entered into a transaction to dispose of its Republic of Korea ("Korea")
based subsidiary, Haydale Technologies (Korea) Co., Ltd ("HTK") to its
local director, Minon Kim (the "Disposal"). HTK is currently a distributor of
Haydale products serving the South-east Asia region.
As part of the fundraising announced in October, the Company stated that it would
undertake a rigorous review of all aspects of the business with a view to
reprioritising those areas offering up near term (as well as long term)
profitability, positive cash generation, and other strategic options which align
with Haydale's core strengths and accelerate certain commercial activities. One
element of this work undertaken immediately by the Board was to review the
performance of the overseas entities and potentially dispose of or close them.
HTK had been persistently loss-making and a review of its current opportunities
and order book has led the Board to conclude that a sale to its local director
is appropriate, the associated costs of which are significantly lower than the
estimated costs of closure. The sale to Minon Kim also maintains a distribution
channel partner in Korea for Haydale products if any of HTK's leads mature going
forward.
The Disposal was completed for a nominal consideration of £1, plus the write off
of remaining inter-company debt owed to Haydale, of c.£0.34m. In the FY to 30
June 2024 HTK made a loss before tax of c.£0.12m and had proforma net
liabilities at completion of c.£0.27m. As part of the Disposal Haydale has
granted HTK exclusive distribution rights for the supply of its established
products in Korea for a period of one year (ending 1 January 2026).
Related Party Transaction
The sale of HTK and the granting of the exclusive distribution rights to Mingon Kim constitute related party transactions pursuant to Rule 13 of the AIM Rules by virtue of Mingon Kim's status as a director of HTK. The directors of Haydale, having consulted with the Company's nominated adviser, Cavendish, consider that the terms of the sale and granting of distributor rights are fair and reasonable insofar as the Company's Shareholders are concerned.
For further information:
Haydale Graphene Industries plc
Gareth Kaminski-Cook, Executive Chair Tel: +44 (0) 1269 842946
Patrick Carter, CFO
Cavendish Capital Markets Limited (Nominated Adviser & Broker)
Julian Blunt / Edward Whiley / Trisyia Jamaludin, Corporate Finance Tel: +44 (0) 20 7220 0500
Andrew Burdis, ECM