Tihama’s UAE unit agrees to transfer assets, liabilities of commercial ops for AED 3.7 mln plus inventory value

Logo of Tihama Company for Advertising, Public Relations and Marketing 

Tihama Company for Advertising, Public Relations and Marketing said that its wholly-owned subsidiary, Aventus Global Trading, signed an agreement to transfer the assets and liabilities of its commercial operations for a total of AED 3.7 million plus the cost of inventory on the sale transaction date.

A total of AED 0.7 million from the deal will be used to pay in part the company's obligations, based on the agreement with Nextbite. In addition, Aventus’ inventory will be sold to Nextbite at cost value on the deal completion date.

The book value of transferred assets and liabilities depends on the actual date when each asset or liability is transferred.

Aventus operates in the retail sector in the UAE with branches in Dubai, Sharjah and Abu Dhabi. It sells books, stationery, magazines, newspapers, entertainment products, confectionery and accessories.

The transfer to Nextbite will include franchise agreements, property and equipment for branches, projects under construction and inventory, as well as the transfer of future obligations for branch leases and the dues to contractors for assets under construction. Moreover, Aventus employees will transfer to Nextbite.

The transfer is limited to assets and liabilities related to the business operations of Aventus. No shares in Aventus, which are owned by Tihama, will be sold. Tihama will retain its 100% ownership in Aventus after the deal completion and it will operate in non-commercial activities.

The agreement is subject to obtaining all necessary approvals from the relevant stakeholders and authorities to complete the transfer of the franchise rights and lease commitment contracts.

The financial impact of the transaction cannot be currently determined, as it depends on the date of completion of the transfer process of assets, liabilities, and inventory of the company.

The deal is part of a restructuring process in the group and exit from loss-making business segments. It may generate significant financial obligations in the future, and the mortgage release of a property owned by Tihama, which was used to guarantee a performance bond. This will reduce the group’s non-cash facilities (contingent liabilities), the statement concluded.