CHINA – The Biesse Group has reached an agreement for the total sale of the company Dongguan Korex Machinery Co. LTD with registered office in Dongguan (Guangdong province-China).

The value of this transaction is estimated at CNY 183.5 million (€ 22.5 million) and, if all contractual provisions are met, the deal is expected to be completed by mid-March 2021.

Also the entire financial settlement of the operation is expected to be effected within the next month of March, through the contribution of the bank J.P. Morgan of Hong Kong.

As already pre-announced on 20 December 2019, in addition to the possible production synergies that will also involve the Group’s company in India, this operation will lead to a reduction in operating costs that had contributed to accumulating losses of €32 million at Korex.

The expected impact on the Group’s consolidated financial statements is a capital gain of around € 17 million.

“The above does not change the conviction that China can remain the main country for the demand of furniture and, more generally, of capital goods, with an expected growth rate higher than the current world average; the Biesse Group intends to maintain and strengthen its presence in the entire Far East area through its branch offices in the region, dedicating a particular commitment to the Chinese branch (Biesse Trading Shanghai). In the post-sale deal, the Italian and Indian production companies will be therefore more involved in order to satisfy the needs of the Chinese market, towards which the Biesse Group – with all its business divisions – remains firmly oriented” explained Biesse in a press release.

Korex Machinery Ltd. has been manufacturing woodworking machinery since 2004 at its location in Dongguan City, Guangdong Province. Biesse had acquired Korex in 2012.