China Recycling Energy Corporation Transfers WHPG Project to Jitie for US$14.7 Million
Jun 24, 2015, 08:00 ET
XI'AN, China, June 24, 2015 /PRNewswire/ -- China Recycling Energy Corp. (NASDAQ: CREG) ("CREG" or "the Company"), a leading industrial waste-to-energy solution provider in China, today announced that Xi'an TCH Energy Technology Co., Ltd.("Xi'an TCH"), its wholly owned subsidiary, recently entered into a Repurchase Agreement for the Waste Heat Power Generation ("WHPG") Project ("Repurchase Agreement") with Sinosteel Group Jilin Ferroalloys Co., Ltd. ("Jitie"). Under the Repurchase Agreement, Jitie will repurchase the WHPG Project from Xi'an TCH at a total price of approximately US$14.7 million (RMB90.0 million).
The Company completed the WHPG Project in December 2013,and started to lease it to Jitie in January 2014 for a period of 24 years. The Company initially invested about US$10.1 million (RMB61.7 million) in the WHPG Project and received net monthly minimum rental fees from Jitie of about US$0.3 million (RMB1.7 million), for a total of about US$4.8 million (RMB29.5 million) as of June 18, 2015.
In December 2014, Sinosteel Group, Jitie's controlling shareholder entered into an equity transfer agreement with Liaoning ZhongZe Group for the transfer of ownership of Jitie, pursuant to which Liaoning Zhongze Group became the controlling shareholder of Jitie. Due to the change in its strategic plan and business restructuring, Jitie notified Xi'an TCH that it requested the repurchase of the WHPG Project. After negotiations, the Company agreed to an early transfer of the WHPG Project for a price of about US$14.7 million (RMB90.0 million).
Mr. Guohua Ku, Chairman and CEO of CREG commented, "Due to the industrial consolidations in China over the past years, we experienced early termination of several lease contracts in recent months, among which Jitie is the latest one. We believe that the early termination fee more than compensates the Company for the loss of future income and we will deploy the cash from the early transfer to fund new projects already under contract. In the meantime, we will keep monitoring industry trends and make sure we are well prepared to respond to the changing dynamics of the industries we serve. In addition to developing new energy recycling solutions, we are also exploring new operating and revenue models that we believe will benefit both our clients and the Company going forward. We expect to complete one new system by the end of the second quarter."
About China Recycling Energy Corp.
China Recycling Energy Corp. (NASDAQ: CREG) ("CREG" or "the Company") is based in Xi'an, China and provides environmentally friendly waste-to-energy technologies to recycle industrial byproducts for steel mills, cement factories and coke plants in China. Byproducts include heat, steam, pressure, and exhaust to generate large amounts of lower-cost electricity and reduce the need for outside electrical sources. The Chinese government has adopted policies to encourage the use of recycling technologies to optimize resource allocation and reduce pollution. Currently, recycled energy represents only an estimated 1 percent of total energy consumption and this renewable energy resource is viewed as a growth market due to intensified environmental concerns and rising energy costs as the Chinese economy continues to expand. The management and engineering teams have over 20 years of experience in industrial energy recovery in China. For more information about CREG, please visit http://creg-cn.investorroom.com.
Safe Harbor Statement
This press release may contain certain "forward-looking statements" relating to the business of China Recycling Energy Corp. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For more information, please contact:
Mr. Jackie Shi, Chief Financial Officer
China Recycling Energy Corp.
Tel: +86- 139 9287 0723
Email: [email protected] / [email protected]
Ms. Xiaoyan Su (China)
Email: [email protected]
Mr. Christian Arnell (China)
E-mail: [email protected]
SOURCE China Recycling Energy Corp.
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