Vancouver-based alternative fuel company Westport Fuel Systems has announced it is selling off roughly a third of its 35% share of a joint venture in a deal valued at over $14 million.
Located in China, the shared venture Weichai Westport Inc. is in part responsible for production, testing as well as research and development of products. Ownership of the company is shared 40% with Weichai Holding Group, China’s largest heavy-duty engine manufacturer, and 25% with Hong Kong-based auto parts manufacturer Hong Kong Petersen Equipment Ltd.
Announced August 22, Westport’s sale of its 11.7% stake to Weichai Holding Group and another undisclosed customer consists of a cash payment of 48.2 million RMB, about $9.3 million. The rest the proceeds will be made in the form of a dividend payment of 23.8 million RMB, about $4.6 million.
Weichai is also involved in a sales agreement with the other major shareholder, Hong Kong Petersen. The two sales will increase Weichai’s ownership to above 50%, making it the majority shareholder.
Westport Fuel Systems will retain a minority ownership in the venture of roughly 33%.
In addition to the sale, Westport Fuel also signed a framework agreement for the supply of alternative fuel system components. The final release of all funds to Westport fuel Systems remains subject to Chinese approval processes and foreign exchange.
