Amtek to sell Crocodile brand inventory to pay loans, creditors

PETALING JAYA: Amtek Holdings Bhd said it will use the RM8 million cash it will raise in the disposal of its Crocodile brand inventories to pay loans and creditors, after its unit decided to terminate the licensing agreement with Crocodile International Sdn Bhd on Jan 8, 2018.
As at Sep 30, 2017 the company's total borrowing stood at RM7.9 million. CISB has signed a new licensing agreement with a unit, Miroza Leather (M) Sdn Bhd, under MESB Bhd that will run between Feb 1, 2018 until Dec 31, 2020.
In a filing with Bursa Malaysia, Amtek said that it has entered into a sale and purchase agreement with CISB to dispose its entire brand inventories, accessories and retail fixed assets located at consignment sales outlet, boutique and warehouse for RM8 million cash.
The two parties have agreed to terminate the remaining period of the licence agreement dated July 1, 2014, between February 1, 2018 to March 31, 2019 for both the men’s apparel and small leather goods signed between AISB and CISB. The move has pushed the company to a Practice Note 17 status with the obligation to come up with a regularisation plan in the next 12 months.
“AISB will commit to the remaining obligations of the agreement that is applicable up to 31 January 2018. However, during the sell-off period of one month in January 2018, CISB agrees to charge AISB royalty at the same rate as the existing license agreement based on actual net sales and agrees to waive the Corporate Advertising Fund fee for the month of January 2018 only,” Amtek’s board of directors said.
Amtek's shares gained 13.85% to close at 37 sen with 36,500 shares done.