Hot Tuna, the troubled surf wear retailer, is selling itself to Brand Holdings for £950,000. The news saw the company lose more than a third of its value at the start of trading in London.
Hot Tuna had a very bad 2011 during which it reported sales of just £210,000, down from £500,000 the year before. Its operating loss last year was £860,000, in 2010 it lost even more: £1.4m.
The sale to Brand Holdings, who will pick up Hot Tuna's domain names, trade marks and some of its existing stock, must be approved by shareholders.
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A general meeting has been scheduled for the 6th of February after which it is expected three members of the current board will resign and Mark Battles, the Chairman of Nexus Management, will be installed as non-executive Chairman.
The cash settlement of £950,000 will be used to pay off outstanding debts although after that process the group will still retain cash of around £600,000, essentially becoming a cash shell.
The left-over money may go on an acquisition or be distributed to shareholders.
Should the company go down the acquisition route it is looking at businesses operating in the technology, media or entertainment sector with the UK and Europe; more importantly, the group is looking for enterprises with growth prospects which, "if achieved, will be earnings enhancing for shareholders".
Reflecting the change of nature of the company, it intends to change its name to Concha.
BS
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