ADAS specialist Veoneer says it has signed a binding agreement with Nissin Kogyo, its joint venture partner in Veoneer Nissin Brake Systems (VNBS), providing for 'certain structural changes to the joint venture and reaching an agreement on the funding of VNBS'.
Under the agreement Veoneer will acquire Nissin Kogyo's interests in the US operations of VNBS (VNBA), for one US dollar, and VNBS will transfer or license the VNBS technologies necessary to operate the VNBA business to VNBA.
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The US operations of VNBS, including the transferred or licensed technologies, will thus become a wholly-owned Veoneer business. In return, effective upon closing, Veoneer will release Nissin Kogyo from any obligations to fund VNBA in the future and from any claims Veoneer may have had against Nissin Kogyo relating to VNBA. VNBS will also provide certain transitional services to VNBA.
The VNBS operations in Japan and China will remain a part of the joint venture, with Veoneer owning 51% and Nissin Kogyo owning 49% of the joint venture.
Under the agreement, Nissin Kogyo will either provide guarantees for certain VNBS commercial loans, or contribute capital to VNBS, in either case corresponding to 49% of the funding Veoneer has previously unilaterally provided VNBS. Veoneer expects to receive approximately $20M as debt repayment from VNBS after such funding.
The agreement between Veoneer and Nissin Kogyo resolves the funding situation previously described by Veoneer in its public filings and allows for Veoneer to continue reviewing and evaluating the development priorities and strategic options of its brake systems business.
The transaction is expected to close on or around June 28, 2019.
VNBS designs, develops and produces brake control and brake actuation systems for the global light vehicle market. VNBS is a joint venture between Veoneer and Nissin Kogyo. The joint venture started its operation on April 1, 2016 with manufacturing facilities in Japan, China and the United States. As one of the most safety-related parts of the car, brake systems continue to experience rapid and innovative developments. Looking ahead, VNBS says it is determined to be a market leader in brake control and actuation systems for future cars.
