The joint venture shall comprise Huakai’s current business. Huakai develops and manufactures electrical distribution systems to truck, construction vehicle and bus segments in China. The key customers are Foton (and Beijing Foton Daimler Automotive), Kinglong and Iveco. Foton is the fourth biggest truck manufacturer in China with 11% market share in 2014.
The joint venture is accomplished through a new company that will be established by Huakai in Danyang, Jiangsu province in China with an equity value of RMB 150 million / EUR 22 million. PKC contributes RMB 150 million / EUR 22 million via share issue to be financed from PKC’s cash resources. After the capital increase the total equity value of the joint venture is RMB 300 million / EUR 44 million and PKC owns 50% and Huakai 50%. The frame agreement contains specific terms regarding PKC’s right to consolidate.