New Joint Venture Agreement

10 Jun 2008 07:00



SOFTWARE RADIO TECHNOLOGY PLC

("SRT" or the "Company")

SRT is pleased to announce that its wholly owned subsidiary, SRT PMR Technology Limited, has formed a multi-million dollar joint venture with Taiwan based, Groupco Technology Inc "Groupco", to manufacture and sell TETRA products based upon SRT  know-how. 

Under the Agreement, SRT has taken a 19% stake in Groupco in a mixture of initial license payment and support fees totalling US$1.6m plus additional ongoing royalties. Groupco will immediately commence the marketing and sale of SRT's recently launched TETRA OEM handset under their own brand and will now also commence the development of their own localised handset using SRT's core technology, due for launch during 2009. 

Groupco Technology is owned and controlled by the Yieh Phui Group ("the Group") which is one of Taiwan's largest public industrial conglomerates with annual sales of over US$1 billion. Through its activities the Group has maintained interests in radio communications for many years and has excellent links with potential local buyers.

Simon Tucker, SRT Group Managing Director said, "Earlier this year we decided to form closer relationships with a select number of our license customers so that a greater degree of localisation can take place. This clearly provides our customers and their customers with significant benefits. At the same time we wanted to increase the future intrinsic value of these agreements for SRT and therefore taking a stake in our customer secures this. Although it will take time, the plan is for Groupco to float on the local Taiwan stock market, providing SRT with the potential for significant capital gain." 

Mr KC Chen, Groupco CEO said, "We have been in the radio business for over 20 years and therefore know our market and buyers well: we are respected and trusted. This deal enables us to aggressively and confidently enter the TETRA market with our own products. We expect to build a business of significant value over the next few years."

Note: This Agreement replaces a previous standard format license agreement between SRT and Groupco.

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About SRT:

Founded in 1987 and quoted on AIM in 2005, SRT develops and provides core wireless technology and product solutions for homeland security communication and maritime identification and tracking applications. SRT's solutions enable its customers to enter these markets quickly and without risk with their own unique product proposition and leverage local sales channels. The Company has a worldwide customer base from which it earns a combination of support, license, royalty, module and product derived revenues.