25th Mar 2020 14:59
(Alliance News) - Versarien PLC on Wednesday said it has signed a joint venture agreement with Young-Graphene (Beijing) Technology Co Ltd for development of Versarien's materials technologies in China.
Shares in Versarien were up 59% at 46.80 pence in London on Wednesday afternoon.
The Chinese joint venture will be 50% owned by Versarien and Young-Graphene with CNY1 million, around GP121,000 of investment put in by each partner over the next 12 months provided certain milestones are met.
Versarien's Beijing Versarien Technology Co Ltd wholly owned foreign enterprise will become the joint venture company.
The joint venture is to have exclusive use of Versarien's technologies in China, while Versarien keeps the rights to its existing technologies and intellectual property with newly developed IP being retained by the joint venture or end users.
The agreement includes and is contingent on a commitment by Young-Graphene to procure subscriptions for 15% of Versarien's shares from third parties in thee tranches. Half the funds of these subscriptions will go towards the joint venture.
If Versarien does not receive CNY35 million of income under the agreement within 24 months of the joint venture business licence's issue, it is entitles to buy Young-Graphene's entire equity interest in Beijing Versarien Technology at a nominal price of CNY10.
Moreover, if Young-Grapehe does not procure a definitive agreement for the first Versarien subscription by June 2020 then Versarien will, again, be able to acquire the remainder of Beijing Versarien Technology for CNY10.
Versarien Chief Executive Neill Ricketts said: "Despite the impact of Covid-19 around the world, the company has been able to continue to make progress on executing its strategy in China, as illustrated with the confirmation of this joint venture agreement. As highlighted in our February 2020 update, discussions are continuing to facilitate an equity investment in Versarien."
By Anna Farley; [email protected]
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