Winnipeg, Manitoba - (Press Release) - Gendis Inc. (TSX:GDS) announces the sale today, for nominal consideration, of all of the shares of its wholly-owned subsidiary SAAN Stores Ltd. to SAAN Acquisition Corp. of Toronto, Ontario. SAAN Acquisition Corp. represents an investor group experienced in retail operations and financing world-wide, which is associated with Avalon Group, Ltd. of New York City.
Earlier this week, Gendis announced that it designated SAAN as a discontinued operation due to the expectation of its sale in the fourth quarter, and recorded the fair value of SAAN at nil, with a resulting write-down of $38.9 million after estimated selling costs. Gendis also, earlier this week, disclosed its potential exposure under lease guarantees, consequential upon sale of SAAN. Gendis now expects the selling costs to increase by an additional $700,000 as a result of concluding the sale of SAAN. Under the terms of the sale agreement, Gendis has agreed to advance a $2 million interest-bearing loan to SAAN on a secured basis late in the first quarter of fiscal 2006.
The lawsuit commenced by a prospective purchaser has been discontinued without costs.
Gendis has now exited the retail industry and, other than as noted above, faces no additional exposure