Spinnova operates in the textile industry. The company has developed a production technology for textile fibers, known as SPINNOVA® fiber, which is manufactured using a mechanical production process. In addition to its main business, research and development is conducted in the area, and the company offers service and related peripheral services. The company operates on a global level with headquarters in Jyväskylä.
We believe this new brand partnership is a positive addition to Spinnova's network of partners and will support the long-term outlook for demand of fiber produced using the company's technology. However, we do not believe that the agreement will have a significant financial impact in the near future. Reducing technology investment and production costs and identifying technology investment partners continue to play a key role in the company's commercialization efforts.
We have not made any material changes to our forecasts for the commercialization progress of Spinnova's technology following the company's H1 report. Due to the exceptionally difficult-to-assess risk/reward ratio, we are maintaining a cautious stance on Spinnova for the time being.
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Spinnova released its H1 report this morning. For a development company like Spinnova, short-term numbers are of secondary importance, so our attention in the report was particularly drawn to the comments on technological development and the new strategy announced in June. On this note, the company provided reassuring news yesterday when it announced that it had signed agreements with Suzano regarding the purchase of Woodspin and Suzano Finland, as well as other matters related to the arrangement (incl. the removal of exclusivity rights and Suzano's 5 MEUR capital contribution to the purchased companies) in accordance with the letter of intent announced in June. Overall, based on our preliminary assessment, the report does not contain any significant surprises in relation to market expectations.
In the H1 report, we will pay particular attention to the comments regarding the new strategy, and we are also interested in the timeline for securing the letters of intent agreed upon with Suzano.
Spinnova continues to commercialize its technology on its own, which we believe was quite expected. Overall, Spinnova's hefty release package yesterday left us with a fairly neutral picture and did not materially change the share's risk/reward ratio.
Spinnova's strategic choices going forward are key for the company's share. Based on the fairly large organization remaining with the company, we believe it is possible that the company will continue to commercialize its technology mainly on its own. We have been expecting Spinnova to announce its strategy before the summer holidays.
The news follows Suzano's decision in February to withdraw from the planned investments in Spinnova's fiber production. We are not at all surprised by the downsizing of the organization and the savings plans, as Suzano's decisions will at the very least delay the company's entry into the revenue-generating commercial phase.
The news follows Suzano's decision in February to withdraw from the planned investments in Spinnova's fiber production. The situation with Woodspin is difficult, as Suzano is unlikely to have an interest in the company, while we believe Spinnova cannot finance the loss-making Woodspin without partners.
