The AWN Holdings Ltd (ASX: AWN) share price is rocketing today. This comes after the company provided investors with an update on its 46.8% owned subsidiary, VivoPower.
Headquartered in London, VivoPower is an international company that delivers comprehensive suite of sustainable energy solutions. This includes battery technology, electric vehicle, solar and critical power services.
The AWN share price touched a 52-week high of $1.70 in morning trade, before retracing after some profit taking. At the time of writing, the funds management company's shares are up 14.49% to $1.58.
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What's pushing the AWN share price higher?
In today's release, the company advised its subsidiary, VivoPower has completed its acquisition of Tembo. This follows the recent board decision which gave the green light for the remaining 49% stake in the specialist electric battery and off-road vehicle company. VivoPower paid US$2.2 million and issued 15,793 VivoPower shares to Tembo management.
Previously, VivoPower took a 51% ownership of Tembo during October last year.
As a result of the latest acquisition, VivoPower will allocated US$10.9 million of its capital to invest in Tembo. The funds will be injected in stages, dependent on Tembo reaching its quarterly commercial targets. This will allow Tembo to ramp up production efforts to fulfil customer orders and deliveries in a timely manner.
In addition, VivoPower recently reached a distribution agreement with partner, GB Auto Group, in Australia.
The landmark deal is expected to provide revenues of up to US$250 million during the first 4 years. VivoPower highlighted that when factoring in the converted Toyota vehicles, the contract is the largest of its kind in Australia.
Under the terms of the contract, GB Auto will be exclusive distributor of the Tembo electric Toyota Land Cruiser, electric Toyota Hilux, and Tembo electric vehicle conversion kits.
Management commentary
Commenting on the acquisition, VivoPower executive chair and CEO, Kevin Chin, said:
Our intention has always been to move to 100% ownership of Tembo, and the GB Auto deal has enabled this to occur at least two years ahead of plan. We are pleased to be able to fund this from existing cash reserves and the issuance of 15,793 VivoPower shares to Tembo's management shareholders.
We are now focused on scaling up capabilities and executing at pace in order to meet strong customer interest and demand.
