Haydale Graphene Industries has warned that revenues for the year will be below forecasts and announced that Everpower has agreed to to make a strategic investment in the company of £3.26m to acquire a 9.9% and
This investment would be made through Everpower's subsidiary, Fu Xing New Materials Development (Heze) Co.
Haydale and Everpower have entered into non-binding heads of terms as a pre-cursor to entering into an exclusive binding collaboration agreement to manufacture, supply and market existing Haydale products and develop nanomaterials and new graphene products for the Chinese market.
It is expected that they will negotiate and enter into a collaboration agreement following completion of the proposed investment.
Haydale also issued a trading update form the six months to the end of December.
It said that as previously announced on 15 December, the customer sampling process with Huntsman Corporation for graphene infused Araldite epoxy resin had taken longer than the group originally anticipated and, as a result of this, commercial revenues from this agreement were now expected to commence in the first half of the next financial year.
In addition, Haydale made a strategic decision to focus on sourcing and securing key collaboration partners at the expense of short term revenue from the sale of reactors to third parties, leading the board to believe that group revenue for the current financial year will be below market expectations.
Chief executive Ray Gibbs said: "While the slower than originally anticipated development towards commercial sales affects our short-term revenues, continued development of the next generation commercial products provides us with significant confidence for the longer-term success of the Group.
"Haydale is working with some leading businesses around the world, and we are setting the foundations in place for the Group to realise its potential as a global commercial entity.
"We have learnt much from the collaboration with Huntsman, including novel unique dispersion know how that can be used in many other applications. What has become clear is that Huntsman have a desire to make sure that a product launch, especially of one of their major brands is done right first time.
"The positivity flowing from the technical evaluations, exhaustive testing and compliance rigour will stand us in great stead when dealing with other world class organisations.
"The markets that Haydale's next generation enhanced products are aimed at are significant, world-wide markets and therefore a degree of patience needs to be taken to ensure consistency of supply of the highest quality in meeting customer expectations."