Hong Kong investor to lift jetpack
New Zealand's Martin Aircraft has struck a deal with Hong Kong investment fund KuangChi Science worth up to $52.5m over the next 2 1/2 years.
The cornerstone investment puts the aviation company, with ambitions to be the world's first to market with a commercial jetpack, back on track for an ASX listing in February.
KuangChi Science was introduced to Martin Jetpack when its chief executive accompanied Chinese President Xi Jinping on his visit to New Zealand in November.
KuangChi Science have also since signed a memorandum of understanding with Airways New Zealand, the state-owned company that manages air traffic control.
Martin Aircraft is raising capital to fund the commercialisation of its signature Martin Jetpack, invented by company founder Glen Martin.
First sales are targeted for third quarter 2016, with the retail price estimated to be around US$200,000 (NZ$255,240).
The focus of the company's marketing campaign is to sell the jetpacks, which can fly up to two passengers, as a first responder vehicle for emergency services.
In addition to ambulance officers and firefighters, it is expected there will be a smaller market for joyriders.
KuangChi Science is an investment company listed on the Hong Kong stock exchange that is focused on research and development for space materials. It also owns a paper products company and property portfolio.
The Chinese company will become a major shareholder in Martin Aircraft after striking a deal to buy $21 million worth of shares in its initial public offer.
"We are excited with the prospect to partner on this disruptive transport technology.
"With our knowledge of advanced materials we hope to be able to help build a lighter, stronger Jetpack with increased payload and range that will open a whole new set of market opportunities here in China and globally," KuangChi Science executive chair Dr Liu Ruopeng said.
Martin Aircraft chief executive Peter Coker said the partnership was ideal as it brought relevant expertise as well as a much-needed cash injection.
"The KuangChi Science investment agreement not only brings significant capital to drive forward the commercialisation of the Martin Jetpack, it also introduces a whole new R&D world of meta-material technology and advanced simulation testing that enables product development that in our opinion is well beyond the capabilities of even some of the world's best aircraft manufacturers," Mr Coker said.
Other investors can still apply for shares in the IPO at the discounted share price of A40c (NZ42c), down from A50c (NZ52c). The offer will close February 13, with a maximum subscription of $27 million (NZ$28.3m).
Following the float in Australia the two parties will form a new Chinese joint venture, which KuangChi Science will control with a 51 per cent stake.
As well as becoming a major equity stakeholder in Martin Aircraft, and a joint-venture partner, KuangChi Science has also promised to help the company with its debt funding.
The Chinese backer has committed to subscribe for between A$23 million (NZ$24.2m) and A$29 million (NZ$30.5m) worth of convertible notes, to be issued within 30 months of the IPO.
- Sydney Morning Herald