VivoPower International (NASDAQ: VVPR) shares are rallying on Wednesday after the company and its subsidiary, Tembo e-LV B.V entered into a non-binding Heads of Agreement with GB Auto Group Pty Limited and GB Electric Vehicles Pty Ltd in Australia.
VivoPower said the will hope to confirm and expand GB Auto’s position as the exclusive distributor within Australia for the Tembo electric Toyota Land Cruiser, electric Toyota Hilux, and Tembo electric vehicle conversion kits.
The proposed agreement is a seven-year deal with GB Auto committing to purchasing at least 500 Tembo electric conversion kits in the first year of the contract, and at least 2,000 kits during the first four years. In total, combined with the electric vehicles, the orders are worth approximately $250 million in revenue.
GB Auto stated it plans to increase its Australian footprint and add additional facilities to deliver on the volumes. Tembo will offer GB Auto the first right to refuse distribution rights for any other products Tembo offers for sale in Australia.
VivoPower will own all of the vehicle operating data and allow GB Auto a non-exclusive, non-transferable, no royalty licence to use the data for sales and maintenance of Tembo products.
“We are very pleased to be entering this partnership with GB Auto in Australia given their long-established track record and reputation with their customers, who comprise some of the world’s pre-eminent mining houses.”
VivoPower’s stock is trading over 33% higher on the back of the news, at $10.6.