1. INTRODUCTION
The Board of Directors of Betamek is pleased to announce that BESB had on 15 June 2023 entered into a Memorandum of Understanding (“MOU”) with Shenzen Zhonghong Technology Co. Ltd. (“SZH”) to develop and market innovative technology solutions for automotive industry and to create a joint entity that will leverage their respective strengths to maximize market penetration and profitability.
2. INFORMATION ON SZH
SZH was incorporated in China as a private limited company focusing on research & development and innovative automotive electronic product software and hardware technology.
3. SALIENT TERMS OF THE MOU
The salient terms of the MOU, amongst other, include the following:-
- The MOU shall commence on 15 June 2023 (“Effective Date”) and shall remain valid and in force for a period of twelve (12) months from the Effective Date. Either party may terminate the MOU upon three (3) months’ notice in writing by setting out the reasons for the termination provided that such termination will not affect any ongoing projects or obligations that have already been agreed and acted upon. The MOU may be extended by written agreement of both parties.
- Pursuant to the MOU, the joint venture agreement shall be based on the principle of good faith and shall be negotiated and executed by both parties within a reasonable period of time after the signing of this MOU. The terms and conditions shall be agreed by both parties.
4. RATIONALE OF THE MOU
The purpose of the MOU is to undertake a collaboration in the areas as disclosed in Section 1 of this announcement to achieve the following:-
(a) To establish a mutual relationship to become a marketing arm and service hub that target the automotive customers in ASEAN region;
(b) To develop and market a range of new innovative products including automotive cockpit system and advance driver-assistance system (“ADAS”) which combine internet of things (“IoT”) connected technology with robust, safety design and intuitive user experience;
(c) To develop other electric vehicles (“EV”) systems and related electronics products;
(d) To generate new intellectual property (“IP”) and give the joint venture a unique and differentiated offering in the market; and
(e) To access the new technologies that will benefit to both parties.
5. FINANCIAL EFFECTS
The MOU will not have any material effect on the earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholding of the Company for the financial year ending 31 March 2024.
6. RISK FACTORS
The risk factors involved in this MOU at this juncture are expected to be minimal and in the event BESB enters into a future definitive agreement with SZH, the Board of Directors and Management of the Company will exercise due care in considering the associated risks and benefits.
7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED TO THEM
None of the Directors and/or major shareholders of Betamek and/or persons connected to them have any interests, direct or indirect, in the MOU.
8. STATEMENT BY DIRECTORS
Having considered all aspects of the MOU, the Board of Directors of the Company is of the view that the MOU is in the best interest of Betamek.
9. APPROVAL REQUIRED
The MOU is not subject to approval of the shareholders of the Company and any relevant government authorities.
This announcement is dated 15 June 2023.