Graphene group takes control of China operation and announces £5m loan
Advanced materials engineering group Versarien, which operates its 2-DTech arm in Manchester, has converted its 50-50 joint venture in China into a wholly-owned entity by the UK business.
It also announced a £5m loan from Innovate UK Loans, a wholly-owned subsidiary of UK Research and Innovation, today.
The funding is specifically for a project named G SCALE – an acronym for Graphene-Seat, Concrete, Arch, Leisure, Elastomer – which is designed to enable Versarien to significantly increase its manufacture of quality assured graphene.
Neill Ricketts, Versarien, chief executive, said: “Versarien is delighted to have been awarded this loan by Innovate UK, which acknowledges the work we are undertaking and advancements made.
“Our vision for the business also sits within the context of the UK Government’s industrial strategy ‘Grand Challenges’, which is focused on clean growth, the ageing society, AI and the data economy and the future of mobility.
“The loan will help Versarien step up its graphene production capacity so that we can expedite the commercial adoption of graphene enhanced materials.”
Regarding the change in ownership in China, the company had signed an agreement with Young-Graphene (Beijing) Technology Company (YG) to create a 50%-owned Chinese joint venture out of the company’s previously wholly foreign-owned enterprise, Beijing Versarien Technology Co, (BVT), for the development of the company’s activities in China.
Versarien can exercise a backstop arrangement if YG fails to procure agreement for the first Versarien share subscription by June 30, 2020. Under this backstop arrangement the company can purchase from YG all of its equity interest in BVT for a nominal price of approximately £1.
The company said the lpst three months have seen significant progress by YG. However, the recent and ongoing lockdown restrictions in both China and the UK, coupled with the impact of political events in Hong Kong, have, understandably, had an impact on the process and the ability of YG to complete the first Versarien share subscription.
Therefore, the Versarien board has decided to exercise the backstop arrangement and return BVT to 100% Versarien ownership for the time being.
Versarien said it remains in discussions with YG.
Today, the company also announced the appointment of Matt Walker as head of international strategy and government relations, following the completion of his secondment from the Department for International Trade.
Neill Ricketts said: “COID-19 and the complex political environment has obviously impacted our plans in China, but this does not alter our strategy for expansion, of which China is but a part.
“We remain well-placed in China and the triggering of the backstop arrangement with YG has not fundamentally altered our strategy.
“However, in all our activities we are very conscious of the need to protect our IP and are grateful for the support and assistance we have been receiving from the UK Government.
“Matt Walker’s contribution to Versarien during his secondment, particularly with regards to the expansion of our activities in Asia, has been invaluable.
“We are thrilled to have him with us on a full-time basis at this crucial moment, as we build on establishing Versarien as a global leader in the advanced materials sector.
“We look forward to releasing our preliminary results in August and providing an update on the progress we have been making with our collaboration partners at that time.”