KUALA LUMPUR (Oct 30): YBS International Bhd (KL:YBS) said that it has amended several key terms in the agreement with Nasdaq-listed Enovix Corp on the manufacturing of batteries for the latter.
According to the bourse filing, the amendments were related to the assignment and obligation of purchase related to the Gen2 Autoline 1 which is housed by YBS in the Penang Science Park.
YBS in 2023 was roped in by Enovix to become a non-exclusive supplier of Enovix in Asia for manufacturing of lithium-ion batteries.
Enovix’s Gen2 autoline will have a production capacity of 1,350 units per hour and will be able to produce up to 10 million units of batteries a year.
Under the latest amendment, Enovix is now fully responsible for the initial investment of US$100 million (RM440 million).
This is as opposed to the earlier agreement dated July 27, 2023, which stipulated that Enovix will invest US$30 million and YBS has the obligation to finance US$70 million.
The amendments also include the markup payment terms and fees to be paid by Enovix to YBS for the services provided.
Based on the new terms, YBS is also fully responsible for obtaining and maintaining working capital requirements to sustain compliance with the terms, including, without limitation, fulfilling Enovix’s purchase requirements for materials.
There is also a modified markup fee percentage to account for manufacturing services performed by YBS for Enovix for the existing and future lines.
The markup fee is based on direct and indirect materials, direct labour, utilities and repair and maintenance.
Both parties also agree that the shortfall of the markup fee, if any, shall be payable by Enovix to YBS, based on the monthly invoice.
Previously, Enovix said it has committed to invest US$1.5 billion in Malaysia over the next 15 years and to have multiple lines by 2026.
The two parties have already amended the terms of the manufacturing agreement for the first time on Dec 18, 2023, to clarify the responsibilities with respect to the financing arrangements under the agreement.
YBS’s shares closed one sen or 1.4% lower at 73 sen, giving it a market capitalisation of RM191.91 million. The stock has risen 5% year-to-date.