Azure Dynamics Corp AZDDQ

Vehicle Electrification Joint Venture

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From Magna PR

Vehicle Electrification Joint Venture

The proposed new joint venture would involve the engineering, development and integration of electric vehicles of any type, the development, testing and manufacturing of batteries and battery packs for hybrid (H) and electric vehicles (EV) and all ancillary activities in connection with electric vehicle technologies. Magna would invest $220 million for a 73% interest. Magna's contribution would include the assets of Magna's recently established E-Car Systems vehicle electrification and battery business unit, certain other vehicle electrification assets, and the balance in cash. Among other operations, Magna E-Car includes the Ford battery electric vehicle (BEV) integration program that launches next year. The Stronach group would invest $80 million in cash for a 27% interest in the joint venture and would have effective control through the right to appoint three of five board members, with Magna appointing the remaining two members.

Although the joint venture would be free to pursue any type of business activity connected with electric vehicles, Magna would have an unrestricted right to engage in competitive activities outside of the joint venture, and neither party would be obligated to provide any future funding or financial assistance beyond its initial contribution.