Versarien has announced that it has entered into an agreement with MCK Tech to sell the Group's plant and equipment in South Korea for a total consideration of £604,000, together with an exclusive license agreement with MCK Tech for the use of five patents, owned by the Group, for additional fees.
The Company continues to pursue its stated turnaround strategy, an integral part of which is to dispose of non-core businesses and assets. The plant and equipment acquired from Hanwha Aerospace in South Korea in 2020 were identified as non-core and marketed for sale. The Group's mature businesses, AAC Cyroma Limited and Total Carbide Limited, continue to be marketed for sale and the Company is progressing discussions with a number of interested parties, though the timing of any further asset sales and the quantum of the funds that may be received remains uncertain.
The net proceeds of the Transaction will be used for the Group's corporate and working capital purposes. The Company continues to actively seek additional short and longer term funding solutions to support its turnaround strategy.
Under the Agreement, MCK Tech is paying £604,000 for the Korean Plant, which comprises the assets of the CVD (Chemical Vapor Deposition) graphene business carried out by Versarien's subsidiary, Versarien Korea Limited, and owned by the Company.
As at 31 March 2023, the date of Versarien's last notified balance sheet, the gross asset value of the Korean Plant was £844,151. Versarien Korea Limited, which operated the Korean Plant, made a loss after tax of £771,690 in the 18 months to 30 September 2022.
In line with the Company's strategy to monetize intellectual property through licensing, Versarien has granted an exclusive license to MCK Tech, for an initial period of five years, to use five patents owned by the Company in their business in Korea. These five patent licenses are in addition to 14 patents the Company licenses to Graphene Lab. MCK Tech will pay Versarien an amount equal to 4.5% of the total sales revenue earned from products manufactured using the IP. If the sales revenue derived from the IP is less than £250,000 over the first two years of the License, the Licence will terminate and MCK Tech will pay Versarien £40,000 for use of the IP.
Dr. Stephen Hodge, CEO of Versarien, commented: "As previously outlined, Versarien's strategy is to be a manufacturing-light business in the UK and license our patents, know-how and other intellectual property to key partners. In line with this strategy we are pleased that we have secured the sale of the Korean CVD graphene production equipment and licensed five patents to MCK Tech. MCK Tech is a well-respected company that has developed graphene-based sensors for healthcare. MCK's CEO, Dr. Seungmin Cho, is one of the pioneers of CVD graphene in Korea, formerly working as Group Leader at Samsung Techwin and Hanwha Aerospace, prior to founding MCK Tech in 2017, a joint venture with the Centre for Advanced Meta-Materials (CAMM) in Daejeon. We look forward to maintaining access to CVD graphene materials and supporting MCK Tech through collaborative efforts."
Dr. Seungmin Cho, CEO of MCK Tech, commented: "Acquiring the CVD graphene production equipment is a strategic move to vertically integrate CVD graphene manufacturing and developing applications. Securing the assets and licensing the IP will help us to become a more dependable materials supplier for our valued customers and enable us to shorten the application development cycle to provide new CVD graphene applications covering the IT, military, and healthcare industries. As we are acquiring the heritage of Samsung Techwin and Hanwha Aerospace, we are building on their pioneering work to consolidate our position in the graphene industry. Most of all, MCK Tech is pleased to establish a firm relationship with Versarien, a renowned graphene company, and is looking forward to collaborating in commercialising CVD graphene as well as graphene flakes in the years to come."