4iG Units' Ownership Deal with Colt CZ Group International

N7 Defence Holding, Arzenál Fegyvergyár ['Weapons Factory'] and Colt CZ Hungary signed a binding term sheet with firearms manufacturer Colt CZ Group International on Monday, parent company 4iG said on Tuesday, MTI reports.

The term sheet sets out the framework for the recapitalization of Colt CZ Hungary, the restructuring of its ownership structure and the main terms of the parties' future manufacturing and commercial cooperation.

N7 Defence and Arzenal Fegyvergyar are majority-owned indirect subsidiaries and Colt CZ Hungary is an indirectly held minority subsidiary of 4iG. Colt CZ Hungary is currently held 51% by Colt CZ Group International and 49% by N7 Defence Holding.

Under the agreement, the two shareholders have carried out a cash capital contribution of HUF 3.42 billion in Colt CZ Hungary, in proportion to their respective shareholdings. The capital increase is intended to restore the equity position of Colt CZ Hungary, adversely affected by the company's operations during the period preceding the acquisition of N7 Defence Holding by the 4iG Group, and to strengthen the company's financial position.

N7 Defence Holding will acquire the 51% shareholding held by Colt CZ Group International. As a result of the transaction, N7 Defence Holding will become sole owner of Colt CZ Hungary.

The parties intend to maintain and develop their long-term manufacturing and commercial cooperation following completion of the ownership change. For N7 Defence Holding, the transaction will create the foundation for the further development of Hungary's defence industry by consolidating manufacturing activities under Hungarian ownership while maintaining a long-term strategic partnership with Colt CZ, 4iG said.