China Jinjiang Environment Holding shareholders to sell 29.79% stake for $320m

Around 430 million shares will be sold to Zhejiang Energy International and Zheneng Capital Holdings Co.

The controlling shareholders of waste-to-energy (WTE) operator China Jinjiang Environment Holding Company are selling their interests in China Green Energy, which owns a 29.79% stake in the firm, for approximately $320m (RMB1.63b), a filing with the Singapore Exchange (SGX) revealed.

An approximate 430 million shares will be sold to Zhejiang Energy International and Zheneng Capital Holdings Co., both of which are controlled by state-owned provincial energy enterprise Zhejiang Provincial Energy Group Co (Zheneng Group). Zheneng Group mainly engages in electric power source construction, electric and thermal power generation, development, trading and transportation of petroleum, coal and natural gas, energy services, and energy finance.

The group said the deal was struck because the shareholders believed that the entry of the purchases as shareholders of the company would facilitate the financing and future development of the firm.

The announcement also revealed that the group’s controlling shareholders Dou Zhenggang and Wei Xuefeng are deemed interested in 49.99% of China Green Energy, whilst their daughter Jennifer Wei holds the remaining 50.01% of the interests.

Following the proposed transaction, Dou Zhenggang and Wei Xuefeng are expected to be the second largest controlling shareholders of the company, with a shareholding of approximately 25.82% each. “They will work with the purchasers to ensure a smooth transition in the management of the company,” China Jinjiang Environment noted.

As the collective shareholding of Dou Zhenggang, Wei Xuefeng and immediate family members have dropped below 45%, they disclosed that the transaction will result in a change of control of the company.

“Upon the occurrence of both a change of control and S&P Global Ratings or Moody’s Investors Service decreasing the rating of the Notes within a period of 6 months (known as a change of control triggering event), not later than 30 days following such event, the company will be required to make an offer to purchase all outstanding totes at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to (but not including) the date of purchase,” the group added.

The completion of the proposed transaction is expected to take place by 10 September 2019, subject to the satisfaction or waiver of all conditions precedent.