GUH Holdings Berhad (GUH), via its wholly-owned subsidiary GUH Capital Sdn Bhd (GUH Capital) has entered into a cooperation agreement with Shenzhen Xixin Electronic Technology Co Ltd to jointly establish a RM12.87 million battery assembly plant.
In a Bursa listing today (Nov 10), the company said the plant will be producing high quality lithium battery products and services for the market outside China.
The plant which will be established under a joined venture company (JV company) GUH Power Sdn Bhd, which GUH will have the 75% stake in, while Xixin shall hold the balance 25%.
The plant shall be fully invested by GUH Capital with Xixin to provide technology and assist GUH Capital in planning the entire plant layout, production line, the detailed specification and to set up a power battery pack production line.
The initial cost of investment, it added, will be around RMB20,000,000 (or approximately RM 12,870,000) which will be funded by internally generated funds.
“Xixin shall provide the JV company with a complete technology transfer plan, including detailed descriptions of technology transfer contents, process, implementation plan and support,” it said.
GUH said the collaboration represents an opportunity for the company to participate in the lithium battery business which is one of the global industries with high growth potential.
“As Xixin has leading technology and experience in lithium battery production and rich intellectual property rights, technical documents, patents, software, among others, Xixin will provide the JV company with comprehensive technical support and after sales service.
“Barring any unforeseen circumstances, the transaction is estimated to be completed by the end of 2023,” it said.
As the JV company operations will be fully managed by GUH Capital, the company said Xixin shall be exempted from legal liability and debts that arise from the said company.
“However, Xixin shall not receive dividends from the JV company until after the it makes and retains profits equivalent to the amount invested by GUH Capital into the JV company,” the company added.