KURA Kurawood

 

TIDMKURA 
 
RNS Number : 7814X 
Kurawood PLC 
21 August 2009 
 
Kurawood Plc ("Kurawood" or the "Company") 
Disposal of Subsidiary and signing of first full Manufacturing License 
Pursuant to the Company's change of strategy to focus on international licensing 
opportunities and move away from manufacturing, that was announced on 24 
December 2008 and details of which were included within the Annual Report and 
Accounts for the twelve months ended 30 September 2008, the Board of Directors 
are pleased to announce the following transactions: 
Disposal of subsidiary 
The Company has completed the sale of the Company's entire equity interest in 
its wholly-owned subsidiary, PG Industries Limited ("PGI"), to Peter Duncan 
McArthur (a former director of the Company and PGI) and Ian Douglas Macrae (a 
former director of PGI) for a nominal consideration (the "Disposal"). Prior to 
completion of the Disposal ("Completion"), Kurawood converted all residual 
liabilities (including a recent advance of NZ$118,600 to settle certain third 
party creditors) owing by PGI to Kurawood (after the assignment of intellectual 
property rights noted below) into equity in PGI. Immediately following 
Completion Kurawood does not own any shares in PGI and PGI has no outstanding 
liabilities owing to Kurawood. 
Under the AIM Rules, as the disposal is to a previous director of the Company 
and persons who were both formerly directors of PGI, it constitutes a related 
party transaction for the purposes of Rule 13. The Directors consider, having 
consulted with the Company's nominated adviser, Zeus Capital Limited, that the 
terms of the disposal of PGI are fair and reasonable insofar as the Company's 
shareholders are concerned. In advising the Directors, Zeus Capital Limited has 
taken into account the commercial judgement of the Directors. 
Release of Lease Guarantee 
Following Completion, Kurawood has been released from any existing or future 
lease guarantee obligations in relation to the lease of premises occupied by PGI 
and owned by a company related to Ian Macrae. The Directors estimate that the 
maximum liability under the lease guarantee could have been in excess of 
NZ$450,000. 
Assignment of Intellectual Property Rights 
Prior to completion of the Disposal, PGI entered into a Deed of Assignment with 
Kurawood wherein PGI has assigned to the Company all property, right, title and 
interest in the intellectual property of PGI for a total consideration of 
NZ$1,500,000, such consideration being satisfied by way of set off against the 
liabilities owing by PGI to Kurawood. 
Signing of first full manufacturing license 
Contemporaneously with the above, the Company has granted PGI a license to use 
the intellectual property of Kurawood to manufacture and sell Vecowood  and 
AcetowoodTM. The terms of the license agreement include exclusivity to 
manufacture and sell these products within New Zealand, subject to PGI meeting 
certain minimum annual volume commitments. PGI has also been granted 
non-exclusive rights to sell products manufactured under the license in the 
following eight Asian countries; Indonesia, Japan, Korea, Malaysia, People's 
Republic of China, Singapore, Thailand and Vietnam. 
 
 The terms of the 
licence include a production royalty of 4% of the sales revenue generated by PGI 
for an initial period of 5 years or until the expiry of patents filed by 
Kurawood, whichever is the latter. 
Consultancy Agreement 
In connection with the sale, the Company has also entered into an ongoing 
Consultancy Agreement with Peter McArthur, the inventor of both Vecowood  and 
AcetowoodTM technologies. Under the consultancy agreement Peter McArthur will 
assist the Company with future licensing of the Company's technology to third 
parties. 
 
Voting Undertaking 
Peter McArthur and Ian Macrae have undertaken to vote in favour of all future 
resolutions proposed by the Directors at any General Meeting of the Company. 
Together Peter McArthur and Ian Macrae own 10.66 per cent. of the issued share 
capital of the Company. The table below shows (on a diluted and undiluted basis) 
the potential percentage of votes that would be cast in favour at a general 
meeting if Fox Capital voted in favour of a resolution along with Peter McArthur 
and Ian Macrae. 
+-------------------+-------------------+-----------------+ 
| Shareholder       | % shareholding of |  % shareholding | 
|                   |   existing issued |        of fully | 
|                   |     share capital |   diluted share | 
|                   |                   |         capital | 
+-------------------+-------------------+-----------------+ 
| Fox Capital       |             61.83 |           66.08 | 
+-------------------+-------------------+-----------------+ 
| Peter McArthur    |              5.33 |            4.74 | 
+-------------------+-------------------+-----------------+ 
| Ian Macrae        |              5.33 |            4.74 | 
+-------------------+-------------------+-----------------+ 
|                   |             72.49 |           75.56 | 
+-------------------+-------------------+-----------------+ 
 
Mr Roy Tilleard, Chairman of Kurawood PLC commented on the transactions: "The 
Disposal transaction underlines the Company's move to a license-based business 
model whilst securing the future use of 300,000 cubic metres of nameplate 
Vecowood  manufacturing capacity in New Zealand as a demonstration plant for 
this technology. 
We are understandably delighted to be entering into our first full manufacturing 
license and, although PGI has not yet made any sales to date, we are excited by 
the potential of this transaction. We will continue to seek to enter into 
further full manufacturing licenses with identified potential partners in other 
geographical areas." 
Mr Peter McArthur commented: "We are pleased to have concluded the Vecowood  and 
AcetowoodTM License Agreement with Kurawood. Pending tariffs on log exports from 
Russia and signs of returning confidence in the Asian wood manufacturing sector 
give us confidence that the demand for high quality certified lumber will return 
over the next 12 months and that we will find regular demand for Vecowood 
produced from New Zealand's intensively managed Radiata Pine forests." 
 
 
 
For further information on the Company and licensing opportunities, please 
contact: 
Justin Martin, Kurawood plc                                  Tel: 01624 820040 
 
 
Ross Andrews, Zeus Capital Limited                     Tel: 0161 831 1512 
Tom Rowley, Zeus Capital Limited 
 
 
NOTES TO EDITORS 
About Kurawood PLC: Driven by the need to consider alternatives to 
non-sustainable tropical hardwoods and conventional preservative-treated timber, 
Kurawood plc, listed on AIM in September 2007, owns the intellectual property 
for proprietary wood modification technologies that can be used to enhance 
softwoods, giving them the dimensional stability, durability and usability akin 
to tropical hardwoods but at a fraction of their cost. 
Vecowood  is a timber ideally suited for many appearance grade internal 
applications (for instance kitchen and bathroom cabinetry, flooring and other 
internal joinery) and above-ground external applications such as window frames, 
conservatory frames and doors, which can be offered for sale at highly 
competitive prices when compared to tropical hardwoods and other commercially 
available modified timbers. It is, we believe, the only solid wood, whether 
modified or naturally grown, capable of being commercially powder coated and a 
patent has been published to protect the same. The right to the Veco 
formulation and Vecowood 's method of manufacture can be securely licensed to 
independent 3rd parties anywhere located on significantly more financially 
attractive terms than other technology providers operating in this arena; this 
being possible due to the comparatively low required capital expenditure of 
circa GBP2.00 per cubic metre of nameplate capacity. 
 
 AcetowoodTM is a 
timber ideally suited to in-ground external applications such as 
shutters/shading, siding and cladding, decking, outdoor furniture/equipment and 
glulam beams for structural use. Preliminary trials carried out on AcetowoodTM 
confirm superior hardness scores to other available acetylated timbers with 
further results on dimensional stability and durability ongoing. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 DISPMMITMMATBRL 
 

Kurawood (LSE:KURA)
Historical Stock Chart
From May 2024 to Jun 2024

Kurawood (LSE:KURA)
Historical Stock Chart
From Jun 2023 to Jun 2024