Tan Chong loses right to distribute Nissan vehicles in Vietnam

-A +A

KUALA LUMPUR (Dec 14): Tan Chong Motor Holdings Bhd said it is set to lose its right to import and distribute Nissan vehicles and parts in Vietnam with effect from Sept 10 next year.

In an exchange filing today, Tan Chong said Nissan Motor Co Ltd last week issued a notice of termination of its joint venture (JV) agreement with Tan Chong's wholly-owned subsidiary, ETCM (V) Pte Ltd, without stating a reason.

The agreement was signed in 2010 after ETCM bought from Denmark-based Kjaer Group A/S its 74% charter capital contribution in the JV company, Nissan Vietnam Co Ltd, for US$7.4 million then.

The JV firm, in which Nissan owns the remaining 26% stake, has the exclusive right to import and distribute or re-sell Nissan vehicles and their spare parts in Vietnam, for 30 years starting from November 2008.

Tan Chong said the termination of the agreement will have "no significant financial and operational impact on the group for the current financial year".

It said ETCM "remains open to further discussion with Nissan to explore alternative solutions and business opportunities for mutual benefits in Vietnam".

Shares in Tan Chong inched up one sen or 0.7% to close at RM1.44 today, valuing the group at RM939.83 million.