EcoFibre sells hemp food and animal fibre business.

Ecofibre Limited (Ecofibre, Company) (ASX:EOF) has entered into a conditional agreement to sell the hemp food and animal products business of Ananda Food Pty Ltd to a wholly owned subsidiary of Elixinol Wellness Limited (ASX:EXL).

• Total sale price $3.0m

- $2.0m cash on completion, expected late March 2024

- $1.0m earnout subject to cat litter sales growth

The sale is expected to complete by the end of March 2024 subject to various conditions, including receipt of 3rd party consents and completion of EXL’s fully underwritten rights issue.

The price is based on an agreed level of net tangible assets at completion.

Funds from the sale will be used to provide additional working capital for the Ecofibre group as it continues to refine its focus on core businesses and reduce debt.

Ecofibre Chairman Vanessa Wallace -

“Ananda Food is currently too small to deliver near term cash profits from its hemp food and pet products business. This sale will deliver a good outcome for Ecofibre’s shareholders and enable a sustainable future for the combined business.”

“I’d like to acknowledge and thank Kieren Brown and his team at Ananda Food for their dedication and efforts over the years to establish a high quality Australian hemp food business.”