(Stock Code: 1037.HK)
Daiwa Associate To Seek SGM Approval of 3-Year, HK$3.1 Billion Revenue Framework Deal with Foxconn, Company Name Change to MaxNerva Technology
(11 February, 2016, Hong Kong) Daiwa Associate Holdings Limited ("Daiwa Associate", or the "Company", HKG: 1037), has despatched a circular (the "Circular") on 5 February 2016 seeking shareholder approval of its company name change and a series of sales framework agreements with Foxconn Technology Group ("Foxconn") at a special general meeting that is to be held on 29 February 2016 (the "SGM").
Highlights of the items to be approved at the SGM are as follows:
- The Company is also seeking shareholder approval of a series of framework agreements that it entered with Foxconn on 23 December 2015 with respect to providing IT services to the latter group through 31 March 2018 (the "Framework Agreements"). These strategically negotiated Framework Agreements covers IT system operation and maintenance outsourcing; IT project implementation, including Build-Own-Operate ("BOO") projects; and software and hardware sales and procurement. The total revenue implications governed under such Framework Agreements amount to HK$104 million, HK$1.31 billion and HK$1.71 billion for the financial years ending 31 March 2016, 2017 and 2018, respectively.
- Further, the Company has pledged to subject the Framework Agreements to the condition that Foxconn shall contribute no more than 80% of the Company's revenue for each of the financial years ending 31 March 2016, 2017 and 2018, meaning that, upon SGM approval, on top of the revenues arising from the Framework Agreements with Foxconn, the Company shall be deriving at least another 20% of its total revenues from other customers in the same periods.
"The Framework Agreements allow the Company to explore a long term and strategic business relationship with Foxconn, which is the world's largest electronics manufacturing services provider. This will greatly enhance the Company's clientele profile," remarked Denis Tse, Executive Director with Daiwa Associate. "The deal will also provide a substantial, robust source of income for the Company's new IT services business".
Gram Capital has been engaged as the independent financial adviser ("IFA") to Daiwa Associate's independent board committee, and, after taking into account the advice from the IFA, the Company's independent board committee recommended the Company's independent shareholders to vote in favor of the SGM on 29 February 2016.
End of Press Release