06/08/2009 - 10:25

Vmoto in $12m South Korea scooter deal

06/08/2009 - 10:25

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Vmoto has signed a $12 million deal to supply scooters to a South Korean dealer and has secured a $1.5 million facility with the Bank of China.

Vmoto has signed a $12 million deal to supply scooters to a South Korean dealer and has secured a $1.5 million facility with the Bank of China.

In what has been described by managing director Patrick Davin as a "big month", Vmoto will provide five different models of scooters to South Korea's K&C Motors, which has more than 80 dealers in the country.

The deal was struck through Vmoto's wholly-owned Shanghai-based selling agent,Freedomotor Corporation.

Under the deal, Vmoto will supply 2,590 scooters by the end of this year and a further 10,017 by the end of 2010. The scooters will be produced at Vmoto's Nanjing facility in China, its first mass production contract.

Meantime, Vmoto has also entered an agreement with the Bank of China, which will provide RMB9 million ($A1.56 million) for ongoing operating capital requirements for the Nanjing facility.

"Securing the operating account with the Bank of China is hugely significant as it makes available sufficient funds to meet our cash flow requirements as the Nanjing Facility prepares for mass production," Mr Davin said.

"It avoids the need for Vmoto's liquid funds to be tied up in inventory, and will make the management of our cash flows more streamlined.

"It also allows shareholders to be confident that we will not have to go back to the market for further funds for the factory start up."

Shares in Vmoto jumped 0.8 cents, or 11.3 per cent, to 7.9c at 12:04 AEST.

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