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XMH Engineering, a wholly-owned subsidiary of XMH Holdings, entered into a joint venture (JV) agreement with Myanmar MarcoPolo (MMP) and Bulox Power (BP), with an authorised capital of US$50 million.
The purpose of the JV is to manufacture and assemble transformers, generator sets and power solution products in Myanmar, and to provide after sales and maintenance services relating to generator sets or power solution related activities there.
The JV will have an issued and paid-up share capital of not less than US$1 million, which will be subscribed for by the parties in proportion to their shareholdings in the entity.
XMH Engineering will subscribe for 50 per cent of shares, and MMP and BP will subscribe for the remaining 25 per cent of shares each.
XMH Engineering's obligations to the JV are to manage the general operations and to provide the know-how and expertise required for the manufacture and sale of the generator sets and related power solution products.
The rationale for the JV is "in line with the group's expansion plans and represents an opportunity for the group to develop closer links with both existing and potential customers in the region", as part of its "near-market, near-customer" strategy.
The subscription for shares in JV will be funded through the group's internal resources and is not expected to have any material impact on the earnings per share or the net tangible assets per share of the group for the financial year ended April 31, 2017.