July 28, AtoZForex – TechFinancials is a Binary Options platform provider listed on the London Stock Exchange AIM market. Apparently, its joint venture with Hong Kong registered IBID Holdings Limited is being terminated.
TechFinancials IBID Joint Venture initial details
Earlier this year, on the 3rd of February TechFinancials has published a press release, stating that
“TechFinancials (AIM: TECH), a software developer that supplies simplified trading solutions to online brokers, is pleased to announce that the Company has entered into a Joint Venture ("JV") agreement with a Hong Kong registered company IBID Holdings Limited ("IBID" or the "Partner"), a company specializing in the development of high growth, online oriented companies.”
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The JV’s main purpose was to “leverage the expertise of the Group and IBID to accelerate the growth of one of the B2C binary options trading brands of the Group with an objective of increasing the Company's B2C market share, revenues and profitability,” as it is written in the official document.
The Group CEO of TechFinancials, Asaf Lahav, has commented on the JV:
"The Company is very pleased to be forming this Joint Venture with IBID. The Board believes the JV will prove highly beneficial to the Group, providing sales and marketing expertise and additional working capital to grow the brand. In addition, we believe that the combination of mutual strengths of the Company and the Partner will substantially strengthen operating performance.
The collaboration continues our stated strategy at IPO which is to further expand our business through the partnership with key players in the online B2C space. The Board believes the JV will improve the long-term sustainability and consistency of our growth prospects while generating extra cash flow."
TechFinancials IBID Joint Venture terminated - Legal Action expected
However, the Joint Venture agreement between these two companies is canceled. The main reason for the termination of JV , according to TechFinancial, is a violation of the JV agreements by IBID. Also, IBID has failed to transfer its initial investment amount to the JV firm, as it is reported by TechFinancials.
TechFinancials said the legal action can be one of the possible options. Additionally, TechFinancials stated that the cancellation of the JV won’t have a material impact on its financial performance this year, as well as the trading of both its B2C and B2B departments will still be addressing the market expectations.
AtoZForex has reached out to both of the companies for additional comments on the case and currently we are waiting for the response.
The response of IBID Holdings
AtoZForex has obtained the additional insights into the case from the IBID Holdings Officials. The actual official response of IBID Group to the termination of JV was as follows:
IBID Group, the internet focused investment company, issues the following response to
TechFinancials’ statement;
IBID is surprised by the unjustified decision of TechFinancials to terminate the agreement between
them and it intends to pursue its rights through the applicable legal avenues.
IBID Group’s strategy remains focused on undertaking selective strategic acquisitions that enhance
the existing portfolio and where value can be created and meaningful returns to its shareholders can
be delivered.
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