Warisan TC Holdings Berhad’s (WTCH) unit, WTC Automotif (M) Sdn Bhd (WTCA), today had entered into an distribution and service agreement with China’s GAC AION New Energy Automobile Company Limited (GAC AION).
In a Bursa filing today (Jan 11), the group said, with the agreement, WTCA is appointed as the sole and exclusive distributor of electric vehicles supplied by GAC AION, among others.
GAC AION is a manufacturer of electric vehicles and offers new energy products and services under the GAC Group. Aion was introduced as an electric vehicle sub-brand under GAC New Energy in 2018, and as a marquee in 2020.
Meanwhile, WTCA is principally involved in assembly, distribution and sale of commercial and passenger vehicles.
In the agreement, GAC IAON grants WTCA the exclusive right to import, distribute and sell the vehicles supplied by GAC AION and its spare parts, to provide after-sale services as well as appoint dealers with regards to the abovementioned services.
The group said said that the agreement for the GAC IAON project is for the duration of three years and may be renewed by either party with three months notice prior to its (agreement) expiry.
It said that the project will provide an opportunity for the group to diversify its business activities by expanding the product range to electric vehicles sector to cater for diversified customer base.
“It will also align with our objective to drive towards Economy, Environmental, Social and Governance (EESG) for the long-term sustainable growth of our business besides broadening the earning base of the group.
“As WTCH group is involved in assembly, distribution and sale of commercial and passenger vehicles, it will be able to enjoy the benefits and advantages of the synergistic benefits derived from economies of scale with the implementation of the project,” WTCH said.
The group said the agreement will not have any material effect of the group’s issued and paid-up share capital of WTCH and the shareholdings of its substantial shareholders as well as earnings per share and net assets per share.
“(However), the agreement will require funding for working capital purposes and accordingly, there shall be impact on the gearing of WTCH group for the financial year ending 31 December 2024,” it added.