ItN Nanovation enters into joint venture in Saudi Arabia
(Ad hoc) Saarbrücken, 26 October 2010
• Term sheet for establishing joint venture for the production and sale of nanoceramic filter systems and accessories in Saudi Arabia signed with investor group • ItN Nanovation will hold 17.5% share, rising to 40% at a later date • ItN Nanovation will receive USD 2,350,000 for usage rights (recognised directly in income) • Joint venture has model character for international expansion
• Web conference:
ItN Nanovation AG (ISIN DE000A0JL461) has set a milestone in its international expansion of the product range “ceramic flat filters membrane”, CFM Systems®. The company has now agreed the terms and conditions for establishing a joint venture in Saudi Arabia with a Saudi Arabian investor from Jeddah and a consortium of German industrial investors. ItN Nanovation will initially hold a 17.5% share in the joint venture, which will later be increased to 40%. This rise has already been stipulated in the term sheet and must be implemented by 2014.
The parties are likely to sign binding agreements regarding the joint venture by the end of November.
According to the signed term sheet, ItN Nanovation will receive around USD 2.35 million (approximately EUR 1.75 million) up front for providing a limited amount of locally delimited usage rights for the patented CFM nanotechnology systems. ItN Nanovation will use around two thirds of this sum for acquiring its share in the joint venture. The company is likely to recognise this amount as other operating income for the current financial year. Apart from this one-off payment, ItN Nanovation will also receive additional royalties that will be recognised in income. Due to the company’s share in the joint venture, it will also participate in the profits and losses as well as value creation of the joint venture on a pro-rata basis.
The joint venture will operate under the name of Saudi Water Nanovation and produce and sell CFM systems and accessories for flat filter membrane solutions at its own premises in Saudi Arabia. Plans are for the joint venture to construct a plant that will have three times the capacity available to ItN Nanovation AG at present once it reaches the last construction phase (probably in 2013). The joint venture may be able to start up production as early as 2011.
ItN Nanovation’s ceramic flat filter membranes are a brand new solution for filtering systems in the water recycling, drinking water supply and surface water processing sectors. The need for such solutions is particularly high in Saudi Arabia and neighbouring Arabian countries.
Apart from the positive effect on group income, the joint venture has model character for ItN Nanovation in terms of developing the company’s international business in conjunction with local partners, and other joint ventures are already in the pipeline.
The ItN Nanovation management board will be holding a telephone conference for investors, analysts and media representatives on Thursday, 28 October 2010 at 10:00 a.m. CET. They will explain this cooperation in detail and provide information on the company’s outlook for the coming quarters. If you wish to participate in the telephone conference, please contact Diane Selge, edicto GmbH on +49 69 905505-53 or at firstname.lastname@example.org for the log-in data.