US-based technology company Workhorse Group has revealed a plan to spin-off its SureFly aviation division into a separate publicly traded company.

The new company will incorporate all the existing SureFly aerial technology and expertise, including the personal helicopter portfolio, but will not own the assets related to the package express services of the HorseFly drone.

A royalty-free, perpetual licence is also expected to be granted to SureFly to enable the company to use the HorseFly drone apart from the deliveries implemented from a ground-based vehicle focused on package express.

“We believe the decision to spin off SureFly into a separate entity will better facilitate the long-term growth of both companies.”

Subject to the receipt of regulatory approvals, as well as other approvals and customary conditions, the spin off is expected to be completed by the end of this year.

Workhorse Group CEO Steve Burns said: “This agreement provides Workhorse with additional capital to bolster our balance sheet and, once the spin-off is complete, will enable us to focus all of our resources on our core automotive business.

“SureFly has been one of the most exciting products we’ve ever developed and reflects the best representation of the versatility of our innovative platform technologies.

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“And while this new business will likely command a meaningful valuation, we believe the decision to spin off SureFly into a separate entity will better facilitate the long-term growth of both companies.”

Furthermore, as part of the spin-off, Workhorse plans to enter into a transition services agreement with SureFly to offer certain engineering and accounting services that are not anticipated to be provided immediately by employees of SureFly.

Workhorse also intends to retain a portion of SureFly common stock and to distribute a portion of such common stock pursuant to a dividend to its existing shareholders.

As part of the planned spin-off, Workhorse has also signed a note purchase agreement with a group of its existing US-based investors to issue notes with a total principal amount of $5.75m at a purchase price equal to $5m.