- Official approval of Financial Re-Structuring Plan and appointment of Bob Sullivan as Administrator and CEO
- Medium-term Financing of USD 5,0 million guaranteed by Daewoo International and Discover Energy
- Large increase in production output and sales planned over next few months
iQ Power Licensing AG announces the official approval of the Financial Re-Structuring Plan for the joint venture plant iQ Power Asia in South Korea submitted by iQ Power Licensing and appointment of Bob Sullivan, CEO of iQ Power Licensing, as Administrator and CEO of the JV plant, effective immediately.
The plant in Gwangju is a key location for iQ Power Licensing. All batteries produced by the company are using the iQ Power technology and are subject to license fees to iQ Power Licensing. The plant has a high-speed assembly line and a cost effective plate plant.
The plant has had a history of stop-and-go production and poor financial health. In February 2015 the Board of Directors replaced the controversial CEO of the company with Bob Sullivan who in parallel is CEO of iQ Power Licensing.
In order to revitalize the factory and make it attractive for new investment to further increase capacity, the new CEO applied for financial restructuring with creditor protection, known under Korean law as “Rehabilitation”. The approval process took two months due to strong opposition from ex-senior managers led by the former CEO, who is now being investigated on civil and criminal charges in relation to questionable financial and legal dealings done while he was CEO of the company.
Key to the Rehabilitation Plan is a medium-term financing of USD 5 million including working capital, as well as funds for tooling and small capital expenditures to bring the production line to full capacity. The application approval is the kick-off for using the funds to re-start full scale production. The approval also allows for serious talks with potential investors to make further significant investments to double and triple output in the next 24 months.
Over the forthcoming two months the plant output will be raised to 40.000 batteries per month and later this year to 100.000 batteries per month. Following participation of new investors for a further capital injection, the capacity can be raised to over three million batteries per year. The plant layout allows for a capacity of up to six million batteries per year. Discover Energy and Daewoo International both have committed to sell as many batteries as the factory can produce to their worldwide customer base. The plan also has domestic customers and several other smaller customers in Asia and other regions.
The court has appointed an experienced English-speaking Korean co-administrator, who will assist in communication with the court while Mr. Sullivan concentrates on production and daily operations.