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Emcore has entered into a share purchase agreement to create a joint venture with Tangshan Caofeidian Investment Corporation (TCIC) where TCIC will purchase a 60% interest in Emcore's Fiber Optics. The JV, Emcore Fiber Optics, Limited (EFO) will be registered in Hong Kong.
The agreement states that TCIC will pay Emcore approximately US$27.8 million in cash and provide an additional funding of US$27 million to EFO after the closing. This sale will give Emcore the opportunity to focus more on its solar business.
In conjunction with the establishment of the joint venture, Emcore and TCIC have entered into a supplemental agreement in which Emcore agrees to establish its China terrestrial CPV manufacturing and operations base in Caofeidian Industry Zone. The agreement includes a commitment by TCIC to provide Emcore with the equivalent of US$3,300,000 in RMB denominated loans, tax and rent incentives and assistance in developing Emcore's solar power business in China.
Emcore management will address the details of this transaction in its upcoming December quarter earnings conference call.
