Metech International has announced the termination of their joint venture with Jurong Barrels & Drums Industries (Jurong BD).
In April 2021, the two sides entered into a joint venture agreement to establish a joint venture company, to be incorporated in Singapore.
This company was supposed to explore the provision of environmental services globally, with an immediate focus on water treatment in China.
Metech was supposed to have a 70% stake in the JV company, with Jurong BD holding the remaining 30%. The JV company would have an issued and paid-up share capital of $100,000.
At the time of the JV agreement, Metech disclosed that Jurong BD specialises in the revitalisation and reconditioning of steel and plastic drums, and had started various investments in wastewater treatment projects in Singapore and China.
Jurong BD’s controlling shareholders and management have had a long-standing business relationship with Metech’s principal shareholders and management, after having traded with each other in the metal recycling industry for many years.
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Metech says that as of Oct 13, the JV company has yet to be incorporated, as no definitive service agreement with any third party has been secured.
As such, the termination agreement is not expected to have any material financial impact on the net tangible assets and earnings per share of Metech for its financial year ending June 30, 2023.
None of Metech’s directors, controlling shareholders or substantial shareholders of has any interest in this termination, save for their shareholdings in Metech.
Shares of Metech closed at 13 cents on Oct 13, down one cent or 7.14% lower than its previous close.
