Member Article

Smith Electric Vehicles’ deal with Hong Kong battery producers to raise $40 million

North East-founded Smith Electric Vehicles has reached an agreement with Hong Kong battery manufacturers Sinopoly which aims to raise $40 million for the firm.

The three-part investment will see Sinopoly provide $2 million towards Smith’s secured debts, followed by $10 million in preferred stock - subject to the completion of battery supply contract and component supply understanding between Smith and Sinopoly.

The third part of the deal will see Sinopoly subscribe for $30 million of common stock in Smith, should they reach listing on a US stock exchange.

Mr. Cao Zhong, the chairman and executive director of Sinopoly, said: “The Group and Smith Electric Vehicles (SEV) share the same objective in the development of EV projects and have the same entry point into the EV market for making efforts in developing commercial EVs.

After the establishment of strategic partnership between SEV and Sinopoly, SEV plans to purchase power batteries and EV frames as well as other parts and components from Sinoploy.

“With the incorporation of the techniques of the Group, this collaboration will help SEV to control the production cost and enhance the performance of its all-electric vehicles, all while strengthening its competitiveness in the market and generating more revenue for Sinopoly and SEV, thus also achieving a win-win situation.”

Smith, which operates production facilities in Kansas City, shelved plans for an IPO back in 2012, and stakeholders Tanfield Group told investors there is still a very high level of risk that the planned listing process will not be successful.

On March 14 Tanfield indicated a marked dilution of its stake in Smith.

If the proposed deal gains approval from Sinopoly shareholders, Tanfield estimates the deal will take three months and further three months to list on NYSE or NASDAQ.

This was posted in Bdaily's Members' News section by Tom Keighley .