Tan Chong subsidiary's Vietnam JV with Nissan extended

Tan Chong subsidiary's Vietnam JV with Nissan extended
-A +A

KUALA LUMPUR (Sept 10): Tan Chong Motor Holdings Bhd said today the joint venture (JV) agreement between its wholly-owned subsidiary ETCM (V) Pte Ltd (ETCMV) and Nissan Motor Co Ltd (NML) to import and distribute Nissan vehicles and parts in Vietnam, has been extended to Sept 30, 2020 following discussions between ETCMV and NML.

In a Bursa Malaysia filing today, Tan Chong said the JV agreement dated Sept 22, 2010 is supposed to end today (Sept 10, 2019) based on the agreement's termination notice.

"The company hereby wishes to inform that arising from discussions between ETCMV and NML, both parties have mutually agreed via letter of agreement dated Sept 6, 2019 for an extension of the said notice period from Sept 10, 2019 to Sept 30, 2020. As such, the JV agreement will now terminate on Sept 30, 2020.

"The extension of notice period of the termination of the JV agreement has no significant financial and operational impact on the group for the current financial year," it said.

Tan Chong said in its Bursa filing on Dec 14, 2018 that ETCMV had during that month received from NML the termination notice for the JV agreement, under which ETCMV and NML have respective shareholdings of 74% and 26% in JV co Nissan Vietnam Co Ltd (NVL).

"The notice is effective from Dec 9, 2018. NVL was originally established by Kjaer Group A/S and NML on Nov 10, 2008 in Vietnam to undertake the importation and distribution of Nissan vehicles and parts in Vietnam. The JV agreement will terminate on Sept 10, 2019," Tan Chong said then.

At Bursa today, Tan Chong's share price fell one sen or 0.71% to RM1.39 at 2:50pm. The stock saw 27,700 shares traded.