Aspen Group's Dato Murly Manokharan.

Aspen Glove, the subsidiary of Aspen Group, has submitted a petition to the High Court of Penang to wind up its business on July 14 as it is unable to pay its debts.

The news comes after Aspen Glove announced that it was unsuccessful in its proposed disposal of its land and factory at Seksyen 11, Bandar Lunas, Daerah Kulim, Negeri Kedah in Malaysia in April. The land and building were proposed to be sold for a consideration of RMB200.0 million ($61.2 million) in December 2022.

“Given Aspen Glove’s unsuccessful attempts to dispose of its interest in the lease land and factory buildings… mounting legal claims and suits faced by Aspen Glove and the current financial position of Aspen Glove, the directors and shareholders of Aspen Glove… accordingly resolved that Aspen Glove is unable to pay its debts based on actual and/or contingent liabilities and is cash flow insolvent,” says the company in its July 16 statement.

It adds that the petition to wind up the business is in the “best interests” of Aspen Glove and its creditors as it “ensures an orderly wind-down of the affairs of Aspen Glove under the control of a court-appointed liquidator; and is the most time-efficient and cost-effective manner to liquidate Aspen Glove”.

On a pro forma basis, had the winding up of the company been effected on Jan 1, 2021, Aspen Glove’s loss per share would have been 16.62 sen. After winding up, the company’s loss per share would’ve stood at 13.63 sen for the FY2022 ended June 30, 2022.

The group first established Aspen Glove during the pandemic in August 2020 to diversify its existing scope of business.

“The medical gloves market is expected to grow at a compound annual growth rate of over 15% during the period 2019–2025,” the group wrote in its filing dated Aug 12, 2020.

In June 2022, however, the group announced that Aspen Glove would be “significantly” scaling down its operations due to the “increasing headwinds for the medical glove market” among other factors.

Shares in Aspen Group closed 0.1 cent lower or 3.03% down at 3.2 cents on July 14.