[6-K] Nature Wood Group Limited American Current Report (Foreign Issuer)

Rhea-AI Filing Summary

Nature Wood Group Limited (NWGL) has signed a Sale and Purchase Agreement to dispose of its wholly owned subsidiary, Peru Forestry Management Co., Limited, and its subsidiaries (the "Disposal Group") to Bright Sunrise Limited for a token consideration of US$1. The divested business has generated consecutive losses – an unaudited pro-forma loss of US$4.9 million in FY 2024 – and carried an unaudited net liability of approximately US$6 million as of 31 May 2025. An independent valuer assigned the Disposal Group an equity value of US$0.

The Board believes the transaction will remove continuing operational drag and negative cash flow, allowing NWGL to focus on its core trading operations and pursue new product opportunities. Nevertheless, management warns that the remaining Group will still report a FY 2025 loss, driven mainly by (i) a US$14 million debt waiver owed by the Disposal Group and (ii) an US$5.5 million impairment on assets, both booked upon completion.

In effect, NWGL is crystallising historical losses now in exchange for a cleaner balance sheet and reduced future volatility. The Board approved the deal on 30 June 2025, and unaudited pro-forma financial statements of the remaining Group accompany the filing as Exhibit 99.1.

Positive

• Elimination of recurring losses: Disposal Group lost US$4.9 million in 2024 and was expected to remain loss-making.
• Improved future cash flow: Removing negative operating cash flow should bolster liquidity going forward.
• Strategic focus: Management can concentrate resources on core wood-trading business and new product opportunities.

Negative

• One-time charges totaling US$19.5 million (debt waiver + impairment) will push 2025 into a loss.
• Sale at nominal US$1 price highlights historical value destruction and weak bargaining position.
• No immediate revenue replacement: Disposal reduces diversification and may increase dependence on trading segment.

Insights

Financial Analyst

TL;DR: Divestiture removes loss-making unit but triggers one-off charges; long-term cash flow improves, near-term earnings hit.

The sale for US$1 underscores the severity of the Disposal Group’s negative equity and poor prospects. Eliminating a business that lost US$4.9 million in 2024 should lift future operating margins and conserve cash. However, investors must absorb a combined US$19.5 million hit (debt waiver plus impairment) that will push the remaining Group into a statutory loss for 2025. Because the valuation was independently set at zero and the unit holds net liabilities, the Board’s ‘fair and reasonable’ view looks defensible. The transaction improves future cash generation and risk profile but offers no immediate value accretion, so market reaction should be muted to mildly positive.

Corporate Restructuring Specialist

TL;DR: Classic balance-sheet clean-up; strategic focus sharpened, but optics of US$1 sale and large write-offs may concern investors.

Management is effectively paying to exit an under-performing Peruvian asset. The US$14 million debt forgiveness signals the subsidiary’s inability to service intra-group loans, while the US$5.5 million impairment clears impaired assets from books. Post-transaction, NWGL redeploys capital towards trading operations, potentially improving ROIC. Nonetheless, the deal emphasizes prior capital misallocation and heightens execution risk in finding new revenue streams. Impact is strategic rather than financial in the short term—neutral overall.

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of July 2025

 

Commission File Number: 001-41796

 

NATURE WOOD GROUP LIMITED

(Registrant’s Name)

 

Avenida da Amizade no. 1287

Chong Fok Centro Comercial, 13 E

Macau S.A.R.

(Address of Principal Executive Offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F ☒ Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 

 

 

 

On June 30, 2025, Nature Wood Group Limited (the “Company”, together with its subsidiaries, the “Group”) and Bright Sunrise Limited (the “Purchaser”), a limited liability company incorporated under the laws of the British Virgin Islands which is wholly-owned by Mr. Hau Hung Vincent Ho, entered into a sale and purchase agreement (the “Sale and Purchase Agreement”), pursuant to which the Company has agreed to dispose of and the Purchaser has agreed to acquire the entire issued share capital of Peru Forestry Management Co., Limited, a wholly-owned subsidiary of the Group, at a consideration of $1 (the “Disposal”).

 

Peru Forestry Management Co, Limited and its subsidiaries (the “Disposal Group”) are principally engaged in investment holding, manufacturing of wood products and holding of concession rights. The Disposal Group recorded losses in the past two consecutive years with an unaudited proforma loss of approximately $4.9 million for the year ended December 31, 2024. Due to (i) the downturn of the home building and renovation product market worldwide following the global economic downturn; (ii) ongoing wars and armed conflicts around the world; and (iii) the Chinese property sector crisis in China, it is expected that the Disposal Group would continue to incur losses in 2025. It is estimated the remaining Group will record losses for the year ended December 31, 2025, which is mainly attributable to, among others, (i) a waiver of debt due from the Disposal Group to the remaining Group of approximately $14 million (the “Debt”); and (ii) an impairment loss on assets of approximately $5.5 million. The board of directors of the Company (the “Board”) is of the view that the Disposal provides an opportunity for the Group to eliminate the ongoing negative impact on its profitability and cash flows as a result of the losses incurred by the Disposal Group. In addition, the Disposal will allow the Group to concentrate its resources on exploring new opportunities and new product mix. After completion of the Disposal, the Group will continue to focus on trading of wood products and exploring new opportunities.

 

The consideration of the Disposal was arrived after arm’s length negotiation between the Company and the Purchaser on normal commercial terms, after taking into account, among others, (i) the historical loss-making position and negative operating cashflow of the Disposal Group for the two financial years ended December 31, 2023 and 2024; (ii) the valuation of the entire equity interest of the Disposal Group as at May 31, 2025 of $0, prepared by an independent professional valuer; and (iii) the unaudited consolidated net liability position of Disposal Group as at May 31, 2025 of approximately $6 million.

 

Having considered the aforesaid, the Directors are of the view that the terms of the Disposal are fair and reasonable. The Disposal was approved by the Board on June 30, 2025.

 

The financial statements of the Group as of and for the year ended December 31, 2024, and the accompanying notes thereto, are incorporated herein by reference. The unaudited pro forma balance sheet of the remaining Group as of May 31, 2025 and the unaudited pro forma profit & loss statement of the remaining Group for the year ended December 31, 2024, are filed as Exhibit 99.1

 

 

 

 

EXHIBITS

 

Exhibit No.	 	Description
99.1	 	Nature Wood Group Limited. Unaudited Pro Forma Balance Sheet of the Remaining Group as of May 31, 2025 and the Unaudited Pro Forma Profit & Loss Statement of the Remaining Group for the year ended December 31, 2024.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 	Nature Wood Group Limited
 	 	 
 	By:	/s/ Hok Pan Se
 	Name:	Hok Pan Se
Date: July 3, 2025	Title:	Director

 

 

 

FAQ

Why did Nature Wood Group (NWGL) sell the subsidiary for only US$1?

An independent valuation put the Disposal Group’s equity at US$0 with net liabilities of US$6 million, justifying a nominal price.

How much did the Peru Forestry unit lose in 2024?

The Disposal Group recorded an unaudited pro-forma loss of about US$4.9 million for the year ended 31 December 2024.

What are the financial impacts on NWGL’s 2025 results?

NWGL expects a 2025 loss mainly due to a US$14 million debt waiver and a US$5.5 million asset impairment booked at disposal.

Will Nature Wood continue operating in Peru after the sale?

No. After completion, the Group will exit the disposed operations and focus on trading wood products and exploring new opportunities.

What documents accompany this 6-K filing?

Exhibit 99.1 provides the unaudited pro-forma balance sheet as of 31 May 2025 and pro-forma P&L for FY 2024 of the remaining Group.