Leader Environmental Technologies LS9 has divested its full equity interest in Jilin Anjie Environmental Engineering to Gansu Zhengbo Stone for RMB6.6 million ($1.3 million).
A sale and purchase agreement (SPA) was entered into on Sept 21.
Jilin Anjie was incorporated in China on Nov 3, 2005, with a registered capital and paid-up capital of RMB160.0 million. It is mainly in the business of research and development, design, manufacture and installation of environmental protection systems and provision of technical consulting and support services of environmental protection technologies and systems.
With the completion of its last waste gas contract in FY2021, Jilin Anjie has commercially ceased operations.
The company incurred a net loss after taxation of approximately RMB0.6 million for the 1HFY2023 ended June 30. Its net asset value (NAV) for the same period stood at RMB6.0 million.
Gansu Zhengbo is mainly in the stone business, contractors of housing construction and municipal infrastructure projects in China, and is keen to pursue its interest in environmental business.
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Under the SPA, the transaction should be completed by Oct 31. Gansu Zhengbo has also agreed to assume all the assets and liabilities of Jilin Anjie, including the intercompany amount of RMB6.8 million owing from Leader Environmental Technologies.
The respective parties have also entered into an agreement where it assigns the RMB6.8 million to Gansu Zhengbo. The agreement will also offset the sale consideration relating to the sale of 100% equity interest of Jilin Anjie against the RMB6.8 million owed. Finally, the final settlement of the balance of RMB200,000 will be paid within five business days upon the completion of the transfer of the shares to Gansu Zhengbo.
According to Leader Environmental Technologies, the proposed disposal is an opportunity for it to realise a non-performing investment, and prevent further losses and deterioration of its shareholders’ equity.
“This allows the company to focus on its transformation plans to evolve into a technology-driven company in sludge treatment, artificial intelligence water management business, production of high-performance membranes and green-tech investment,” says the company.
“Jilin Anjie has substantially scaled down its industrial waste gas business, and it had not tendered nor entered into any new industrial waste gas contracts since FY2021,” it adds.
Upon the disposal, Leader Environmental Technologies will record a gain of RMB0.6 million in its books.
Shares in Leader Environmental Technologies closed 0.2 cents lower or 2.78% down at 7 cents on Sept 21.
