HI-P produces Yota smartphone ....but Russian client fails to take delivery

Hi-P International's wholly-owned subsidiary,Hi-P Electronics, has commenced arbitration proceedings against Yota Devices Limited for claims of a total sum of approximately USD126 million comprising substantially of finished goods in the possession of Hi-P Electronics.

Hi-P Electronics -- the original design manufacturer (ODM) for the phone -- entered into agreements with Yota to develop, manufacture and supply the Yotaphone 2 dual screen smartphone.

The Claim is in respect of Yota’s breaches of its agreements with Hi-P Electronics for amongst others, failure to take delivery of and make payment for the full minimum order quantity and firm forecast committed by Yota for the Yotaphone 2.

Hi-P Electronics intends to pursue the Claim strenuously, including obtaining release of a sum of USD15 million held in an escrow account.

The Company is confident of Hi-P Electronics’ Claim.

The financial impact of the dispute on the Group’s financial statements for the financial year ending 31 December 2015 will depend on the outcome of the Claim, including appropriate measures that may be taken to sell the finished goods.