Sparton Resources reports that the transaction to acquire JD Holding Inc (JDH) has been restructured. JDH is the parent company for a group of inactive companies engaged in the manufacturing of vanadium flow batteries (VRB) in China.
Under the terms of a new Share Acquisition Agreement (SAA) between a private investment corporation and VanSpar Mining Inc (VMI), Sparton’s 89.8%-owned subsidiary, the corporation will directly fund the acquisition of the shares of JDH for US$3.3 million, pursuant to an existing share purchase agreement between VMI and JDH and its security holders.
In consideration for the private corporation funding the acquisition cost together with a further US$2 million for working capital and US$605,000 to be paid to VMI, VMI will cause 82% of the JDH shares to be transferred to the corporation, with the remaining 18% being retained by VMI. The previous Share Acquisition and Subscription Agreement has been terminated.
The restructured transaction is subject to any necessary regulatory, board and shareholder approvals, and as well as other conditions common in transactions of this nature. Subject to those approvals, the transactions are expected to be closed by mid-November.
The private investment corporation will assume full managerial and administrative responsibility for JDH and its subsidiaries’ battery manufacturing and marketing operations.
VMI’s role going forward will be the exploration, assessment and possible development of any vanadium related resources identified as possible sources of raw material for the manufacturing of VRB battery systems by JDH.
Recent developments in the fast growing, large-scale, domestic and industrial electricity storage industry have highlighted Vanadium Redox Flow Batteries (VRB) as the lowest cost, safest and most efficient type of battery technology solution available today.
The success of the 8MW/hour VRB installation at the Zhangbei project in China which was commissioned by staff engaged by VMI and constructed by the battery manufacturer to be acquired by the private investment corporation and VMI has resulted in widespread recognition of VRB technology and generated new opportunities for building new installations in an international arena.