Enviro-Hub demands $6.95m from Pastel Gloves over failed profit guarantee

PGSB is expected to pay the full amount within seven days of receiving the letter.

Enviro-Hub Holdings has issued a letter of demand to Pastel Gloves Sdn Bhd (PGSB), seeking payment of $6.95m (RM23m) after PGSB's owners failed to meet the profit guarantee stipulated during the proposed acquisition of the company in 2021.

In the acquisition announcement, the owners of PGSB had warranted that the company shall achieve an aggregate audited net profit after tax (NPAT) of not less than $23m for the profit guarantee period.

Should the audited NPAT fall short of the guaranteed amount during the profit guarantee period, the shortfall will be offset against the remaining 37.5% of the consideration Enviro-Hub is set to pay the vendors.

As PGSB failed to meet the profit guarantee in its entirety during the period, Enviro-Hub has opted to take legal recourse.

PGSB is expected to pay the full amount within seven days from the date of receipt of the letter of demand.