At Jun 17 balance sheet has net debt of 2.6m, now post segment sale the net debt is -10m. So cash generation excluding the 14m proceeds is slightly negative. Considering it's a profitable business, that means the working capital (receivable, inventory, paying down payable) went up. That's not an issue in my opinion.
There had been gossip about a sale of this segment for a while now and good to see they got $14m+ in the end. The remaining HCA products production has been moved to Malaysia already and are of higher margin and higher entry barrior.
This announcement reaffirm their ambition with their high growth initiatives in MHT and BioMed, yet they did not update on whether there had been any traction with the global distribution deal. How much they are to burn in marketing and distributing MHT is still unknown. That for me are the overhanging valuation unknown.
There is a battle going on at 44 between convicted buyer and seller. If breaking through there is some money to make. I am in for a trade but could topping up for longer hold depending on further development.
