sale of a portion of synerject llc

FOR
IMMEDIATE
RELEASE:
25
February
2013
Sale of a portion of Synerject LLC
PE
RTH, AUSTRALIA
–
Orbital
Corporation Limited
(“Orbital”)
advises that
it has reached
agreement with Continental Corporation (“Continental”) to change the ownership interests in their
joint venture, Synerject LLC
, effective 1 March 2013
.
Continental will a
cquire an additional 12% interest in Synerject LLC for US$6 million to take its
interest to 70% with Orbital retaining a 30% interest.
The joint venture partners also agreed to
modify
the joint venture agreement, including an increase in the dividend dist
ribution rate
from
45%
to 55% of audited profits.
Orbital will record a profit before tax of approximately
US
$1.5 million on the
sale;
however will also
derecognise deferred tax assets of a similar amount.
Mr Terry Stinson,
Orbital’s
CEO and Managing Di
rector commented “
This sale will
increase
Orbital’s
cash reserves
to approximately
$
1
0
million whilst still retaining a 30% interest in Synerject which
,
based on this transaction
,
value
s Orbital’s remaining share
at US$15 million
”
.
“Th
is
US$6 million will
be used to support our
growth aspirations including;
existing Unmanned
Aerial Systems
(“UAS”) programs; expansion into new UAS
markets and products;
alternative fuel
programs;
other new product development;
capital management; and
potential acquisitions t
hat fit
within our strategy
.
” added Mr Stin