Orbital Corporation says it will sell off a 12 per cent its stake in engine management systems business Synerject to joint venture partner Continental Corporation for $US6 million.
The deal will leave Orbital with a 30 per cent stake in the business with Continental holding the balance.
The two parties have also agreed to increase in the dividend distribution rate of the business from 45 per cent to 55 per cent of audited profits.
Orbital said it would record a profit before tax of approximately $US1.5 million on the sale, but would also derecognise deferred tax assets of a similar amount.
Orbital's managing director and chief executive Terry Stinson said the sale would increase cash reserves to about $10 million, valuing its remaining stake in Synerject at $US15 million.He said the $US6 million would be used to support the company's growth aspirations including its existing drones programs, expansion into new drones markets and products, alternative fuel programs, other new product development, capital management and potential acquisitions.
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