Advanced Ocular Systems (AOS), an Australian eye care company is planning to spin off its remaining ophthalmic assets into a new company, which will earn it $18 million in cash and shares.
AOS has signed a letter of intent with Singapore-based K-One Industries to transfer its assets into a company that will be listed on the Singapore Stock Exchange.
Under the plan, AOS will receive $5 million in cash and $13 million worth of shares in the listed company.
This sale is subject to shareholder approval.
"If successful, AOS will have approximately $4 million of cash and up to $14 million of investments in ophthalmic companies, leaving the company in a much improved financial position," said AOS chairman, Eva Skira.
The new company will raise significant new capital to undertake full exploitation of the Omnifocal Intra Ocular Lens from its Singapore base.
The Omnifocal IOL is a lens that may be implanted during cataract surgery and for the treatment of presbyopia (a vision condition) that will enable patients to enjoy "glasses free living" for most day to day activities.
According to an industry report by Citigroup, worldwide product sales in this market segment were approximately $US200m in 2006 and are anticipated to grow rapidly to nearly $US800m by 2010.
AOS said it would retain an interest in the further commercialisation of the ophthalmic assets, and will be offered board representation to oversee the development of the Omnifocal Inter Ocular Lens.
AOS had been considering a spin-off for some time, and said that it believed the potential profits of the transaction were very positive because the new company would have far greater financial resources to commercialise the Omnifocal IOL.
Shares in Advanced Ocular remained flat to close at 2.5 cents.
