News blog

Sweet China

  • BY: Andrew Hore |
  • POSTED: 28/03/2010 |

Sweet China returned from suspension after reporting its annual results and the subsequent interims to October 2009.

The China-based confectionery maker’s interim revenues slumped from £5.08m to £246,000 in the six months to October 2009. A profit of £334,000 was turned into a loss of £11,000. The company had £13,000 in the bank at the end of October 2009 but it also had net liabilities.

The Hong Kong trading subsidiary was placed in liquidation on 9 December 2009. The entire investment has been written off and that is why the company has net liabilities. The write-off was included in the figures for the year to April 2009.

Management also believes that stock problems have hit its confectionery brands and it does not believe they can trade profitably. It plans to sell back the brand rights to their original owner Ian Walker for £50,000 and the cancellation of his 36.7m shares in the company.

The company has been unable to secure finance to move ahead with a proposed joint venture with a major Chinese confectionery company.

Shares in Sweet China were suspended at 2.5p each during September 2009, which valued the company at £2.44m. When the shares returned from suspension they fell to 0.75p each but recovered to 1.25p each the day after. That values Sweet China at £1.22m.

There has been a proposal from Rivington Street to turn the company into an investment company in the natural resources sector. This will involve the issue of £115,000 of convertible stock with an interest rate of 12% a year to clients of the broker.

An informal CVA has been entered into with creditors which will involve the claims being discounted by 75% and the remaining amount owed paid in shares at 1p each.

A general meeting is scheduled for mid-April. 

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