China Recycling Energy Announces $10.9M Acquisition of Shenqiu Power Generation System
China Recycling Energy Corp. (NASDAQ: CREG) today announced that the Company expanded its waste-to-energy project portfolio with the acquisition of a power generation system. Xi'an TCH Energy Technology Co., Ltd ("Xi'an TCH"), a wholly owned subsidiary of CREG, entered into an asset transfer agreement on September 28, 2011 with Shenqiu Yuneng Thermal Power Co., Ltd. ("Shenqiu") involving a set of 12 MW capacity power generation system. The transaction will be recognized in Q3 2011.
Under the assets transfer agreement, Xi'an TCH purchased a set of 12 MW biomass power generation system from Shenqiu for RMB 70 million (approximately $10,937,500 USD) following the company's completion of the conversion of Shenqiu's non-operating coal fired power generation system into a biomass power generation system. On the same date of purchase, Xi'an TCH leased the biomass power generation system to Shenqiu for a leasing period of 11 years under which the company receives monthly lease payments of 1.8 million RMB (approximately $281,250) for the entirety of the lease. Upon completion of the lease, Xi'an TCH will transfer the biomass power generation system to Shenqiu at zero cost. Shenqiu, the seller and the customer, is located in Shenqiu county, part of Zhoukou City in Henan Province, PRC.
With this acquisition, the Company now has 13 waste-to-energy projects in operation totaling 133 MW and 2 waste-to-energy projects under construction totaling 55 MW.
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