SEVCON, INC. (NASDAQ:SEV) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On June 3, 2017, Sevcon, Inc. (the “Company”) agreed to acquire Xuchang Fuhua Glass Co. Ltd (“Fuhua Glass”)’s entire 50% equity interest in Sevcon New Energy Technology (Hubei) Co., Ltd (“Sevcon New Energy Technology”) for a purchase price of $5,000,000, to an Equity Transfer Agreement. In doing so, the Company has agreed to terminate its equity joint venture with Fuhua Glass, a Chinese limited liability company. The purchase price is payable to Fuhua Glass within 14 business days after notice has been received that the closing conditions, including required registrations and filings with the applicable governmental entities, are complete. The Company also agreed to reimburse Fuhua Glass for the taxes paid by it in relation to the equity transfer in an amount not to exceed $1,173,675, as well as certain ancillary fees. The Company already held a 50% equity interest in Sevcon New Energy Technology and, upon the consummation of the acquisition, Sevcon New Energy Technology will become a “wholly foreign-owned enterprise” under Chinese law.
In connection with the Equity Transfer Agreement, the Company and Fuhua Glass entered into an Agreement on Termination of the Contract of Joint Venture and of the Articles of Association, and the Board of Directors of Sevcon New Energy Technology adopted certain resolutions, to which the joint venture contract between the parties was terminated, Fuhua Glass was released from its obligation to make further capital contributions to Sevcon New Energy Technology, and its representatives were removed from its board of directors.
About SEVCON, INC. (NASDAQ:SEV)
Sevcon, Inc. designs and sells motor controllers for zero emission electric and hybrid vehicles (EVs), under the Sevcon name. The Company operates through two segments: electronic controls and capacitors. The electronic controls segment produces microprocessor-based control systems for zero emission and hybrid electric vehicles. The capacitor segment produces metalized film capacitors for sale to electronic equipment manufacturers. Its controls are used to vary the speed and movement of vehicles. The Company’s customers are manufacturers of on and off-road vehicles, including cars, trucks, buses, motorcycles, fork lift trucks, aerial lifts, mining vehicles, airport tractors and other electrically powered vehicles. Its products and accessories for two wheel pure EVs, four wheel pure EVs, hybrid vehicles and industrial electric vehicles include alternating current (AC) controllers, direct current (DC) controllers, battery chargers, DC/DC converters, displays and power steering.