Opcon: Signs final Contract with Snowman on establishment of Opcon Powerbox JV for China
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Equity of JV should amount to CNY 98 million (approx. SEK 114 m)
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Snowman invests CNY 50 million (approx. SEK 58 m) for 51,0204 % of shares
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Opcon to grant technology license to JV to a value of CNY 72 million (approx. SEK 83,5 m), giving Opcon;
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48,9796 % of shares in JV, equivalent of CNY 48 million (approx. SEK 55,6 m)
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CNY 24 million (approx. SEK 27,8 m) in royalties.
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Following the letter or intent signed in July 2014 and the agreement on main articles presented earlier this month, energy and environmental technology group Opcon AB (publ) has signed a final contract with its strategic partner Fujian Snowman Co. Ltd., Fuzhou, Fujian, China, on the formation of an Equity Joint Venture for the marketing, manufacturing and sales of Opcon’s Waste Heat Recovery technology, the Opcon Powerbox in China and parts of Southeast Asia.
The JV, that is now being remitted for registration, will be responsible for commercializing the Opcon Powerbox in China, which is seen as one of the world’s largest potential markets for waste heat recovery technology with strong growth. According to the feasibility study of the project conducted by Fujian Snowman Co. Ltd., yearly sales in the JV are expected to reach over CNY 220 m within two-three years. The JV will also be responsible for developing Snowman’s existing manufacturing base for future low-cost, quality manufacturing of Opcon Powerbox ORC and WST in China.
Ownership and Capitalisation
The equity joint venture will be owned 51,0204 % by Snowman and 48,9796 % by Opcon. Initial equity of the JV will be CNY 98 million (approx. SEK 114 m). Snowman will for its 51,0204 % pay a total of CNY 50 million (approx. SEK 58 million) in cash.
Opcon’s contribution to equity will be by a system technology license of its proprietary Opcon Powerbox ORC and WST (West Steam Turbine) technology in the Territory with certain exclusivities in China and parts of Southeast Asia. The JV is granted exclusive manufacturing and sales rights of the Opcon Powerbox in China and exclusive manufacturing and non-exclusive sales rights for Taiwan, Thailand, Vietnam, Indonesia, Malaysia and North Korea.
Total value of the marketing, manufacturing and sales rights for the Technology in the Territory has been agreed at CNY 72 million (approx. SEK 83,5 million), of which CNY 48 million (approx. SEK 55,6 m) will be used as Opcon’s equity part in the JV, while the remaining CNY 24 million (approx. SEK 27,8 m) will be paid as royalty to Opcon by the JV.
“Waste Heat Recovery is a grand opportunity to a global problem and one of the most promising venues for energy efficiency and reducing emissions. We believe by combining Opcon’s state-of-the-art technology and know-how with Snowman’s outstanding quality control, low-cost manufacturing advantage and local market presence we aim to create a strong player that can make the Opcon Powerbox an economic and environmental success in China and abroad. Together we are dedicating significant resources to this and have already started recruiting people and meeting up with potential customers in China, says Rolf Hasselström, CEO of Opcon AB.”
“Our vision for this is not only to develop the very large local Chinese market but also to create a cost-effective high performance manufacturing base for Opcon’s sales in other countries as well, says Rolf Hasselström, CEO of Opcon AB.”
Fuijan Snowman Co. Ltd was founded in 2000 and is listed on the Shenzen stock exchange. The Group has around 700 employees. Snowman is one of China’s major actors in industrial cooling. Marketing of its goods and services is primarily done through the brand Snowkey and RefComp.
For further information, please contact
Niklas Johansson, vice president, Investor Relations, Opcon AB, tel. 46 8-466 45 00, 46-70-592 54 53
Opcon AB, Box 15085, 104 65 Stockholm, Sweden
Tel. 46 8-466 45 00, fax 46 8-716 76 61
e-mail: info@Opcon.se
The Opcon Group
Opcon is an energy and environmental technology Group that develops, produces and markets systems and products for eco-friendly, efficient and resource-effective use of energy.
Opcon has activities in Sweden, Germany and the UK. There are around 140 employees. The company’s shares are listed on Nasdaq OMX Stockholm. The Group comprises one business area:
Renewable Energy focuses on the following areas: compressor technology, electricity generation based on waste heat, bioenergy-powered heating and CHP plants, pellets plants, handling systems for biomass, sludge, recycling industry and natural gas, industrial cooling, flue gas condensation, treatment of flue gases and air systems for fuel cells.
Opcon AB (publ) is obliged to disclose the information in this press release in accordance with the Swedish law governing the securities markets and/or trading in financial instruments.
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