The final agreement between tyre manufacturer Michelin and Scandinavian Enviro Systems, regarding an innovative recycling technology, has been pushed back due to the ongoing COVID-19 pandemic. The parties initially expected a final agreement to be reached by mid-year 2020, but have now prolonged the letter of intent until the end of October 2020; the exclusivity agreement is also prolonged pending further details from Michelin and Enviro.
“Our negotiations are continuing with undiminished strength, but factors including the ongoing pandemic, with the accompanying travel restrictions, have meant that we have been unable to proceed as quickly as we had hoped,” said Thomas Sörensson, CEO of Enviro.
“Therefore, we have jointly decided to prolong our letter of intent until the end of October this year, and our joint assessment is that we will be able to provide new information at the end of October this year at the latest.”
In connection with the letter of intent, Enviro conducted and finalised a directed share issue of approximately SEK 32.5 million (US$3.68 million) to Michelin. It corresponds to ownership of 20% after the completed issue, which Michelin subscribed for through its wholly-owned subsidiary Michelin Ventures SAS.
Michelin became the largest owner of Enviro since the completion of the issue at the end of April. Although the following negotiations have proceeded well, the parties have not succeeded in keeping to the schedule as announced previously.