Dairy product maker Hastun Agro Products Limited (HAPL) has entered into an agreement with Naga Limited to sell its Ready to Eat (RTE) business and ‘Oyalo’ brand for ₹25 crore.
The board of HAPL on Wednesday approved the sale and transfer of all assets (except land and building, crates and bins) of the RTE business. Naga Limited is an outsider and does not belong to the promoter/promoter group/group companies.
“This is not a bearish sell-off. The transaction will be effective till the end of April 2022,” it said in a regulatory filing.
HAPL felt that it was the best proposition to sell the RTE business considering its contribution to annual sales, which was less than 0.5% of the company’s total sales.
Also RTE business is not profitable with low volume. The Board was satisfied that the closure would not adversely affect the profitability of HAPL.
As of March 2021, RTE’s net worth (based on the gross value of the assets) was ₹59.87 crore (5.86% of the company’s net worth), while HAPL had a net worth of ₹1,021.51 crore.
The RTE range comprising Pizza and Pasta was manufactured and sold under the Oyalo brand.