Stratech Systems cuts JV with Aeronautics on fears of global recession

The JV company has not even survived 2 years in the business.

According to SGXNET, the Board of Directors of Stratech Systems Limited refers to its announcements dated 2 February 2010 and 12 June 2010 respectively in relation to a joint venture with Aeronautics Ltd. to target the Unmanned Aerial Vehicles market in the Asia Pacific.

Stratech Aeronautics Pte. Ltd. had been incorporated on 4 June 2010, with Aeronautics and the Company holding 60% and 40% of its issued capital respectively. Its principal role is that of an investment holding company and its intended activities were to include building, operating and maintaining Unmanned Aircraft Systems and Unmanned Surface Vehicles (or USVs, vehicles that operation on the surface of water without a crew).

In view of the growing concerns about global recession, Aeronautics and the Company had taken the decision to terminate the joint venture and cease the operations of the JV company. Management will seek to de-register the JV company once it has ceased operations.

Both Aeronautics and the Company will enter into a settlement agreement once they have reached a consensus on the rights and obligations of each party including with respect to funding requirements for costs and expenses in relation to the cessation of the operations and deregistration process.

The Company will release a further announcement to update Shareholders should there be any further developments.

The dissolution of the JV Company is not expected to have any material impact to the consolidated net tangible assets per share and consolidated earnings per share of the Group for the financial year ending 31 March 2012.

None of the Directors or controlling shareholders of the Company has any interest, direct or indirect, in the above transaction, save through his shareholdings in the Company (if any).