WG ENV TECH has signed a joint venture agreement with Changzhou Rongzhixiang
WG ENV TECH signed a joint venture agreement with Changzhou Rongzhixiang, planning to establish a joint venture company in China with a registered capital of 20 million yuan. Dehui Environment will contribute 14 million yuan, while Changzhou Rongzhixiang will contribute 6 million yuan. The joint venture company will focus on the manufacturing of environmental protection equipment and related technology research and development, becoming an indirect non-wholly-owned subsidiary of the company. The board of directors believes that this move will enhance the group's competitiveness and create value for shareholders and other stakeholders
According to the announcement from WG ENV TECH (01845), on March 21, 2025 (after trading hours), Dehui Environment (the company's indirect wholly-owned subsidiary) entered into a joint venture agreement with Changzhou Rongzhixiang, agreeing to establish a joint venture company in China and stipulating terms regarding ownership, funding, and management of the joint venture.
According to the joint venture agreement, the registered capital of the joint venture company shall be RMB 20 million, of which (1) Dehui Environment commits to contribute RMB 14 million in cash; and (2) Changzhou Rongzhixiang commits to contribute RMB 6 million by injecting intangible assets into the joint venture company. Upon completion, the equity of the joint venture company will be owned by Dehui Environment and Changzhou Rongzhixiang in proportions of 70% and 30%, respectively. After completion, the financial data of the joint venture company will be consolidated into the company's financial statements, and the joint venture company will become an indirect non-wholly-owned subsidiary of the company.
The business scope of the joint venture company includes: manufacturing of environmental protection equipment, sales of environmental protection materials, sales of recycled environmental products and environmental protection equipment; research, promotion, and application of new environmental protection products and technologies (subject to the approval of relevant Chinese authorities and the business scope stated in the joint venture company's business license).
The announcement stated that the group has been continuously improving its hazardous waste incineration disposal and solid waste treatment technologies, and leveraging its capital strength to enter the solid waste treatment field, aiming to build a comprehensive environmental protection industry group. The board of directors believes that entering into the joint venture agreement will enable all parties to effectively utilize resources and complement the group's existing business. By combining the group's resource recovery technology (currently applied in the waste plastic recycling business) with Changzhou Rongzhixiang's experience and expertise in resource recovery technology (including specialized environmental protection equipment manufacturing capabilities), the board believes that establishing the joint venture company will enhance the group's existing business through synergies, achieve a win-win situation, and ultimately create value for its shareholders, employees, and other stakeholders
