LONDON (Alliance News) - SerVision PLC saw its share price jump Wednesday after the company said it has entered into a distribution agreement appointing Beijing SIVI Technology Co. Ltd as the exclusive distributor of its video gateway products in China.
SerVision shares were trading 13.60% higher at 3.55 pence per share shortly after the market open Wednesday, the third highest gainer on the AIM market.
Under the terms of the deal, BST will have exclusivity over the distribution of all of the SerVision's video gateway products in these territories until June 2016. The company has also committed to an order schedule comprising six purchase orders with an aggregate value of USD2.5 million over the same period.
SerVision has received an initial purchase order from BST with an aggregate value of USD500,000 of which USD271,825 in cash has been paid to SerVision. The remaining balance of USD228,175 of the initial purchase order shall be paid three days after BST grants the China Compulsory Product Certification, said SerVision, but no later than October 31, 2014.
BST has also agreed to submit additional purchase orders with an aggregate value of USD500,000 before December 31, 2014 and a further four purchase orders by December 31, 2015 with an aggregate value of USD1.5 million according to an order schedule and pricings, said SerVision.
The agreement will see SerVision supply BST with products from across its entire range of video gateway solutions with an emphasis on fixed and mobile systems for fleets and remotely located sites. The AIM-listed company will also be promoting the SVControlCenter, SerVision's enterprise-level video monitoring software platform.
The distribution deal replaces the manufacturing rights agreement previously entered into between SerVision Ltd, the company's wholly owned subsidiary, and Rich Wonder Technology Ltd in May 2010.
BST is a newly established company that is focused on marketing and distributing SerVision's technology for a wide range of mobile security applications in China. The company was established by SIVI Tech China Co, Ltd, a hi-tech company that provides solutions for major security and surveillance companies in mainland China.