- Rehabilitation Plan for South Korean factory approved by Court of Gwangju
- New products introduced and increased sales to current and new customers
- Cooperation with Discover Energy intensifies
- Financial Results for the first six months of 2015
Zug / Gwangju, South Korea, 26 January 2016 – iQ Power Licensing AG (ISIN: CH0268536338; WKN/Security Number: A14M1C; Symbol: IQL) a developer and marketer of technologies for environmentally friendly and technologically innovative starter batteries for motor vehicles and licenses in these technologies, gives a status update on its Korean license partner iQ Power Asia Inc.
Approval of Plan
iQ Power Asia (IQPA) announces the approval of the financial re-structuring plan by the Federal Court of Gwangju. Following long and intense negotiations, the required majority of creditors have voted for the plan submitted by IQPA to the court. The Plan foresees a partial debt re-payment totaling about 37% of the total claims submitted. The amount varies between various secured creditors and unsecured creditors. The payments will be stretched out over a time period starting at the end of 2016 and ending in year 2022.
The approval is a major step forward for the revitalization efforts. With the approval, IQPA has a stable financial basis from which to continue its aggressive expansion program. The approval is significant for both customers and suppliers and will spur further increases in sales. The stability will also allow for a secure basis for investment in plant and equipment to expand the capacity of the factory.
The key to achieving majority approval was the purchase of the senior secured debt by Discover Energy (DEC) as well as the purchase by DEC of the large unsecured debt from the 5 venture capital banks. The purchases represent a significant investment of DEC in IQPA. The purchases also underscore the large potential value of IQPA.
Until the end of the repayment plan, IQPA will remain under the oversight of the Court. The 2 administrators, including the current CEO of IQ Power Licensing AG, will remain in charge of day-to-day operations. All shareholders of iQ Power Asia will retain their current shares at a reduced par value, however the share percentage will be unchanged unless an investor should decide to make a capital contribution.
New products introduced and increased sales to current and new customers
All new tools for production of a full product line of passenger car batteries have now been produced and approved. Several models are already in series production. Testing of the samples for the remaining products are now taking place and all models should be ready for series production in early February.
Many major customers have already placed orders and are anxiously awaiting the shipments. The factory is racing to produce as many batteries as possible before the one week plant shutdown for Lunar New Year in the 2nd week of February.
The expanded model program and the stability of production and delivery are creating increased demand worldwide.
Development work is continuing for improved battery lead plate performance and new types of battery plates for start-stop engines and recreational vehicles. iQ Power Asia is working with many leading European and American chemical companies to find the optimal balance between power output and lifetime capacity for demanding applications.
Cooperation with Discover Energy intensifies
IQPLAG and DEC continue to work together to expand sales and increase the capabilities of IQPA. Although there are many customers for IQPA, all sales efforts are coordinated closely with Discover Energy. The aim of this cooperation is to promote the premium value of the mixing technology in the market. Rather than reduce prices to expand sales quickly, a premium price strategy is being implemented. This will be a significant factor in the long-term success of the technology.
Financial Results for the first six months of 2015
The total assets of the company were largely unchanged at CHF 5,08 million. The equity as a percent of total assets remained largely unchanged at 45% iQ Power recorded CHF 115k in sales revenue and a loss of CHF minus 1.377k. Both figures were significantly less than the previous period in 2014. The drop in sales and profitability were both due to one time events. The revenues and profitability for the 2nd half are significantly better. Details to the results can be found in the Financial Statements and accompanying Management Report.
Batteries with iQ Power technology are designed to generate better performance in Start-Stop applications and to meet the growing demands of electronic usage in vehicles today. Electrolyte mixing is the first significant innovation to the flooded starter battery in decades. Automatic mixing of electrolyte inside the battery ensures uniform acid density for higher sustained performance throughout the entire life of the battery. This prolongs plate life by eliminating acid stratification and thermal gradients, delivering greater material utilization for a lower cost per cycle over conventional batteries. The patented technology was awarded the coveted Automechanika innovation award 1st prize in 2010.