Veoneer has signed a binding agreement with Nissin Kogyo, its joint venture partner in Veoneer Nissin Brake Systems (VNBS), providing for certain structural changes to the joint venture and reaching an agreement on the funding of VNBS.
Under the agreement Veoneer will acquire Nissin Kogyo’s interests in the US operations of VNBS, referred to as VNBA, for one US dollar, and VNBS will transfer or license the VNBS technologies necessary to operate the VNBA business to VNBA. The US operations of VNBS, including the transferred or licensed technologies, will thus become a wholly-owned Veoneer business. In return, effective upon closing, Veoneer will release Nissin Kogyo from any obligations to fund VNBA in the future and from any claims Veoneer may have had against Nissin Kogyo relating to VNBA. VNBS will also provide certain transitional services to VNBA.
The VNBS operations in Japan and China will remain a part of the joint venture, with Veoneer owning 51% and Nissin Kogyo owning 49% of the joint venture.
Under the agreement, Nissin Kogyo will either provide guarantees for certain VNBS commercial loans, or contribute capital to VNBS, in either case corresponding to 49% of the funding Veoneer has previously unilaterally provided VNBS. Veoneer expects to receive approximately $20M as debt repayment from VNBS after such funding.
The agreement between Veoneer and Nissin Kogyo resolves the funding situation previously described by Veoneer in its public filings and allows for Veoneer to continue reviewing and evaluating the development priorities and strategic options of its brake systems business.