Leader Environmental Technologies has entered into a joint venture agreement (JVA) with Shandong Shuifa Zhongxing Group to provide environmental solutions, mainly sludge treatment, smart water and energy management to Shandong Shuifa.
Shandong Shuifa is a large state-owned enterprise established in 2008 in China. It has a registered capital of RMB2.3 billion ($478.4 million).
As at 2020, Shandong Shuifa managed total assets of RMB20 billion.
Under the JVA, Leader Environmental Tech will own 49% of the joint venture company (JVC), while Shandong Shuifa will own the remaining 51%.
The JVC will be incorporated in Shandong Province with a total registered paid-up capital of RMB50 million.
Shandong Shuifa focuses mainly on environmental businesses and has over RMB10 billion of projects in water supply, wastewater treatment, hazardous waste and solid waste treatment.
It has one mainboard-listed company on the Shanghai Stock Exchange and two listed companies in the National Equities Exchange and Quotations.
The investment in the JV will be funded from the proceeds from the rights issue.
“Leader and Shandong Shuifa complement each other on this joint venture. Leader has proprietary technologies in sludge treatment, membrane technology for water treatment and recycling and strong expertise in intelligent water and energy management,” says Dr. Lin Yucheng, executive chairman and CEO of Leader Environmental Tech.
“Shandong Shuifa is an established environmental company and owns a sizeable portfolio of environmental businesses... The partnership with Shandong Shuifa will further accelerate Leader’s expansion in China”, adds Lin.
Shares in Leader Environmental Tech closed 0.2 cent lower or 1.7% down at 11.3 cents on June 30.
