Nanofilm to set up Dongguan joint venture

Proceeds will be used to support the venture’s working capital and business expansion.

Nanofilm Technologies International Limited has entered into a joint venture agreement to establish a new company in Dongguan, China, as part of its strategy to expand its commercial presence in Southern China.

The Singapore-listed advanced materials group said it had signed a shareholders’ agreement with Ms Cheng Xiao Na, Mr Dai Di Sen and HeChuang Tech Pte. Ltd. to set up Dongguan Najin Technology Co., Ltd., subject to regulatory approvals.

The joint venture company will be established with registered capital of RMB6.5m.

Nanofilm will contribute RMB2.0m, representing a 30.8% equity interest, whilst Ms Cheng will hold 38.4%, Mr Dai 15.4%, and HeChuang Tech 15.4%. The registered capital is to be fully paid in cash within five years of the company’s establishment.

The Dongguan-based venture will focus on the marketing, promotion, sale and distribution of vacuum coating equipment and other coating-related systems, as well as the coordination of coating and testing services.

Its target customers span sectors including optics, automotive, consumer electronics, semiconductors, robotics and other advanced manufacturing industries, Nanofilm said.

Under the agreement, the joint venture’s board will comprise five directors, including two nominated by Nanofilm, one each nominated by Ms Cheng and Mr Dai, and one independent director appointed by shareholders.

Nanofilm also disclosed that its wholly owned subsidiary, Nanofilm Vacuum Coating (Shanghai) Co., Ltd., intends to provide a RMB2.0m convertible loan to the joint venture.

The loan will have a five-year term and bear interest at 15% per annum, with the option to convert the principal and accrued interest into equity on a one-for-one basis.

Proceeds will be used to support the venture’s working capital and business expansion.

The company said the joint venture is intended to function as its strategic commercial partner in Southern China, leveraging local market knowledge and industry networks to accelerate market penetration.

A separate strategic partnership agreement will govern the procurement, distribution and supply of Nanofilm’s products and services through the joint venture.

Nanofilm said the investment and convertible loan will be funded from internal resources and are undertaken in the ordinary course of business.

The company cautioned that there is no assurance the joint venture will be successful, and advised shareholders and investors to exercise caution when dealing in its shares.

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