Pelikan International Corp Bhd — along with its subsidiaries involved in the manufacturing, sales and distribution of remanufactured toner, inkjet cartridge and nylon ribbons — are disposing of its businesses in Germany, France, Czech Republic and China for RM30 million.
In a filing with Bursa Malaysia, the group said its printer consumable business is undertaken primarily via Pelikan Hardcopy Production AG (PHP), Pelikan Hardcopy Distribution GmbH & Co. KG (PHD) and Pelikan France S.a.s, and accounts for RM123.1 million or 9.3% of the group’s revenue in the year ending Dec 31, 2016 (FY16).
However, the group said the business had not fared well in the past years due to declining volume and changes in the market, and that it had to undertake several reorganisation exercises to ensure the value of business is still maintained to allow future monetisation of the business.
It incurred losses of about RM24 million from the business under PHP, PHD, Pelikan France, as well as Pelikan Hardcopy CZ S.r.o (Pelikan CZ) and Dongguan Pelikan Hardcopy Ltd (Pelikan China) in FY16.
The printer consumables are distributed under the brand names “Pelikan”, “Geha” and other private labels. The business itself is supported by manufacturing plants in Czech Republic and China, the group said.
“The proposed disposal of the printer consumable business will cut the losses contributed to the group and also result in a stable stream of income, through royalty earned with the trademark licencing arrangement,” it said.
Pelikan said proceeds from the exercise will be utilised to defray the cost of staff terminations and plant closures estimated at RM11 million, whereas the remaining will be used for working capital to wind-down operations of the subsidiaries of the disposed business.
“The board of directors of Pelikan, after having considered all aspects of the proposed disposal of printer consumable business, is of the opinion that the transaction is in the best interest of the company, as it will cut the losses incurred for this segment of the business,” the group said.