Vmoto sells Nanjing Haiyong a year after purchase

LONDON (ShareCast) - (ShareCast News) - Scooter manufacturer Vmoto (Other OTC: VMOTF - news) is selling Nanjing Haiyon, saying it did not strategically fit within its core business. Nanjing Haiyon produces controllers for electric vehicle driving systems and was purchased by Vmoto in September 2014 for an undislosed sum.

At the time, it said the benefits included access to electric vehicle technologies central to an electric driving system and providing access to the electric three-wheel and four-wheel vehicle markets.

However, 12 months down the track, Vmoto sold the company to Cen Cong for CNY2m (£0.204m).

Vmoto managing director Charles Chen said the decision wasn't taken lightly.

"However, after a detailed analysis of the performance of the Nanjing Haiyong business and the returns it was generating, it did not strategically fit within Vmoto's core electric vehicle business." The second tranche of Vmoto shares which were to be issued to the original owner under the terms of the acquisition agreement will no longer be issued.

As a result of the sale, forecast EBITDA for the year has been reduced to between AU$5m and AU$7m (£2.29m and £3.21m), and underlying net profit after tax to between AUD$4m and AUD$6m (£1.84m and £2.75m).

The AIM-listed shares are down 13.94% on the back of the news, down to 14.20p per share at 0939 BST following a trading halt since Monday.