Grand Toys plans to reduce its printing subsidiary's China operations following 'disappointing' results over the last year, including the termination of a 'substantial' number of employees.
The Hong Kong-based toy manufacturer said the downsizing will also involve the sale of a 'significant' number of printing and other machines to pay creditors of Hua Yang, the company's subsidiary.
Hua Yang's joint venture partners are cooperating with the restructuring and cited increased labour costs and the cost of oil as reasons for the unaudited losses during the year.
A deal has been agreed to acquire Wham-O from Cornerstone Strategic Management Limited, a company owned and controlled by Raylin Hsieh, wife of Grand's CEO and majority shareholder Jeff Hsieh and as part of these terms Hua Yang is expected to be sold to Mrs. Hsieh. The firm is meeting with potential investors in the next several weeks for the purposes of raising financing for the Wham-O acquisition.