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(Alliance News) - Xeros Technology Group PLC said on Thursday it has spun out its Qualus tanning business operations to its management team.
The Qualus management team has formed a new company, ESTR Ltd, which has acquired the physical assets associated with the business, its contracts and the Qualus brand.
Xeros has provided ESTR with a capped convertible loan facility in order to fund the business until the end of December. The management team plan to raise further financing to "fully commercialise" the business.
ESTR has the exclusive rights for the use of Xeros' patents in the tanning market and will pay the group a royalty for their use. In the event that ESTR does not meet its contractual obligations, the licensing rights revert back to Xeros.
This spin-out will reduce Xeros' cost base beyond 2019 as part of a previously announced intention to become a pure play licensing company.
"This agreement is another milestone in the migration of Xeros to a pure-play licensing and royalty business and will further reduce our cost base," said Xeros Chief Executive Mark Nichols.
He added: "ESTR is best placed to commercialise our tanning patents. The team has the expertise and credibility both to execute existing and future contracts and to raise the finance required to take the business forward."
Shares in the laundry technology firm were down 7.9% at 6.55 pence in London on Thursday.
By Lucy Heming; lucyheming@alliancenews.com
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