The AWN Holdings Ltd (ASX: AWN) share price is rocketing in early afternoon trade, up more than 33% after posting gains of more than 60% earlier today.
Below we take a look at the latest announcement from one of the investment company's subsidiaries that appears to be driving the big boost in investor interest.
What did AWN announce?
AWN Holdings share price is surging after the company reported a major contract agreement for its subsidiary VivoPower's own subsidiary, Tembo e-LV B.V.
The announcement by sustainable energy solutions company VivoPower revealed it had signed a definitive agreement with Acces Industriel Mining Inc. The agreement will see Acces, a Canadian based industrial equipment firm, distribute electric light vehicles (e-LVs) in Canada, using Tembo's e-LV conversion kits.
According to the release, Acces plans to buy 1,675 Tembo e-LV conversion kits over the next 5 1/2 years for an estimated value of US$120 million (AU$158 million). The majority of sales are expected to occur towards the latter stage of the agreement.
Tembo's e-LV conversion kits remake diesel-powered Toyota Land Cruisers and Hiluxes into "ruggedised e-LVs", which are suitable for use in mining, construction and defence. Areas the company notes are traditionally difficult to decarbonise.
The AWN Holdings share price may also be getting a lift due to the caveat that responsibility for acquiring the diesel Toyotas from Japan, along with their e-LV conversion, sales to end-customers and ongoing maintenance falls to Acces.
Kevin Chin, VivoPower's CEO said the agreement:
[W]ill provide the springboard for VivoPower to deliver our Tembo e-LVs and complementary sustainable energy solutions to Canadian customers. As a leading and trusted provider of equipment and services to the Canadian mining industry, Acces's selection of Tembo as their preferred electric vehicle solution is a testament to the quality of the Tembo product and the value it offers to mining and other industrial customers seeking net zero carbon solutions.
Jean Dion, Acces' CEO added:
We are confident that the Tembo product offers outstanding value to our customers who seek to reduce their carbon emissions, and Acces will not distribute any competing product over the life of the Distribution Agreement.
AWN Holdings share price snapshot
Over the past 12 months, AWN Holdings shares have gained 312%. By comparison, the All Ordinaries Index (ASX: XAO) is up 26% in that same time.
Year-to-date the AWN Holdings share price has continued to outperform, up 41% so far in 2021.
