LONDON (Alliance News) - Auhua Clean Energy PLC Tuesday said Taiwan Ziolar Technology Co Ltd is no longer a subsidiary of the company and is now classed as an affiliate, but said it has managed to retain the right to use Taiwan Ziolar's intellectual property once it is developed.
The environmental technology group said Taiwan Ziolar has secured the investment of an independent investor, Ziolar Holdings Pte Ltd, to inject USD700,000 into the company.
In return, Ziolar Holdings have been issued with 2.1 million new shares, representing a 97.7% stake in Taiwan Ziolar.
"As the company held and continues to hold 50,000 shares of Taiwan Ziolar, the company's ownership has been significantly diluted as a result of the investment and Taiwan Ziolar is now an affiliate of the company," said Auhua.
Auhua acquired Taiwan Ziolar back in May 2014 after purchasing over 6.9 million shares at 40.0 pence per share and at the end of 2014, Taiwan Ziolar had intellectual property worth MYR21.6 million.
Auhua said although this means the company does not have sole control over Taiwan Ziolar or its intellectual property, it is trying to reach an agreement whereby Auhua will have a two-year non-exclusive, non-transferable right to use Taiwan Ziolar's technology to build a 500,000 square metre injection foam solar thermal panel coating facility for the company's own use in the future.
"The company believes that such an arrangement will give the company the opportunity to recoup its original investment value," said the company.
Auhua will still have a representative director on the board of Taiwan Ziolar in the form of Raphael Tham, the company's vice president. Auhua Chief Financial Officer, Jon Sumner, has resigned from the board of Taiwan Ziolar.
Auhua said it agreed for the new investor to acquire the majority stake in Taiwan Ziolar because it is currently a "loss-making research and development company".
"Taiwan Ziolar is in need of financial support and investment which the company is currently not in the position to provide given the depressed global fundraising climate. The company believes that the New Investor will be able to support the overheads of Taiwan Ziolar and provide critical assistance to enable Taiwan Ziolar to produce the prototype for the injection foam solar thermal panel coating technology," said Auhua.
Auhua shares were down 5.6% to 2.76 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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