Since mid-2014, the Group's sales of fabrics and textile materials have all fallen, resulting in a decrease in the Group’s sales of fabrics and textile materials and its revenue. The directors anticipate that the above situation will continue in the future and it is difficult to improve in the short term. Accordingly, the Board considers that the sale of the Disposal Group is in the interests of the company and its shareholders as a whole, which will relieve the Group's overall pressure on the recent accumulated losses from the textile business.
Jinyi Textile (00565-HK), which was suspended from August 31, announced that it sold its textile business to independent wind Li Li, with a transaction amount of RMB 260 million and an estimated sale proceeds of RMB 23.28 million. The net proceeds of $86 million are intended to be used as general working capital for the property operations business.
According to the company, since 2014, Chinese textile companies have faced multiple difficulties, mainly due to the continuous decline in cotton prices, rising labor costs, shrinking downstream demand, falling prices of textile products, slow recovery of the global economy and increased competition in the textile and fabric markets at home and abroad. Since then, the Chinese textile industry has slowed from high growth to low to moderate growth. As a result, since mid-2014, the sales of fabrics and textile materials of the Group have all fallen, resulting in a decrease in the sales price and income of the Group's fabrics and textile materials.
The directors anticipate that the above situation will continue in the future and it is difficult to improve in the short term. Accordingly, the Board considers that the sale of the Disposal Group is in the interests of the company and its shareholders as a whole, which will relieve the Group's overall pressure on the recent accumulated losses from the textile business. After the sale, the Remaining Group will be principally engaged in the property operation business.
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