Allison also purchases additional new ordinary shares raising approximately £2.5 million.
Detailed financial information is provided in the RNS document posted in the investor section of www.torotrak.com
Torotrak (LSE: TRK) has concluded negotiations, under a Licence and Exclusivity Agreement dated March 2009, with its licensee Allison Transmission, Inc. (“Allison”), under which Allison will pay £6.0 million for continued exclusivity to manufacture and sell Torotrak main drive transmissions in commercial vehicle market segments; this exclusivity excludes Torotrak’s other commercial vehicle licensees, Tata Motors and the European Truck and Bus manufacturer (ETBM). Allison has also subscribed for an additional 8,248,434 new ordinary shares in Torotrak at a price of 30.255p per share, representing a 20 percent premium to the average mid-market closing price of a Torotrak share for the 10 business days prior to the date of this announcement, raising approximately £2.5 million.
“Allison is committed to introducing fuel efficient, emissions-reducing technologies and our licensing decision today with Torotrak reflects our determination to be a global leader in this field,” commented Lawrence E. Dewey, Chairman, President and Chief Executive Officer of Allison Transmission, Inc. “We are pleased with Torotrak’s progression following the strategy announced in November 2012 and want to support the investment arrangements with Flybrid, which are forward-looking and offer good growth potential.”
The next step in Allison’s programme is to focus on a final design to optimise performance, size and weight.
Torotrak is taking responsibility for core component testing and to establish a fully conformed supply into the Allison programme, helping to reduce lead times. Torotrak will also assist Allison with product design and validation process support in Europe.
“We see big opportunities for our IVT Transmission to help reduce CO2 and cut fuel costs for commercial vehicle operators,” states Torotrak chief executive Jeremy Deering. “As recently announced, our own predictions of up to 20 percent fuel economy benefit on urban delivery trucks and buses, combined with a substantial reduction in NOx emissions, have been confirmed independently by our licensee, ETBM. We are also encouraged by our recent technology developments, which offer increased fuel economy savings for longer haul applications.” Deering concludes: “The strategy of a more diversified company that we set out in November, with greater control of its routes to market, has taken a significant step forward today. The announcement of the Allison agreement, and our simultaneous announcement regarding Flybrid, represent collectively an important milestone and I believe a true turning point for Torotrak.”
