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China Recycling Energy Corp. Announces the Acquisition of a 20% Equity Interest in Xi'an Xinhuan Energy Co., Ltd.

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Xian, China, Oct. 02, 2018 (GLOBE NEWSWIRE) -- Xian, China, October 2, 2018, China Recycling Energy Corp. (NASDAQ:CREG, ", CREG", or ", the Company", )), a leading industrial waste-to-energy solution provider in China, today announced that on September 30, 2018, Shanghai TCH Energy Technology Co., Ltd. ("Shanghai TCH"), a wholly-owned subsidiary of the Company, entered into an Equity Purchase Agreement (the "Agreement") with Mr. Jihua Wang to acquire 20% of the equity interests of Xi'an Xinhuan Energy Co., Ltd. ("Xinhuan"). 

Pursuant to the Agreement, Shanghai TCH is acquiring 20% of the equity interests of Xinhuan for an aggregate purchase price of RMB 320 million (approximately $46.72 million) ( the "Purchase Price"), which will be paid as follows: (i) in cash in the amount of RMB 60 million (approximately $8.76 million); (ii) in the form of 2.6 million shares of the Company's common stock using a value of $1.90 per share; and (iii) in the form of 17,376,950 shares of the Company's preferred stock using a value of $1.90 per share, which such class of stock has not yet been authorized or designated.  The preferred shares will have no voting rights but will have preferential dividend rights to participate in and receive a 15% premium on a per share basis for any dividends declared and paid by the Company on its common stock. The holder of the preferred shares (the "Holder") has the right to convert the preferred shares into shares of the Company's common stock on a 1:1 basis after the 6 month anniversary of the issuance of the preferred shares, but the Holder may only exercise the conversion rights to the extent that, after giving effect to the issuance of common stock after such conversion, the Holder would beneficially own less than 20% of the Company's issued and outstanding common stock.

The payment of the Purchase Prices in the form of the 2.6 million shares of common stock and 17,376,950 shares of preferred shares of the Company (the "Share Payment") is contingent on the Company receiving shareholder approval at a special shareholders meeting for the Share Payment under the Agreement, and to create the new class of preferred shares and increase the number of authorized shares of common stock.

Mr. Guohua Ku, Chairman and CEO of the Company, commented: "We are very pleased to announce the good news that the Company has officially signed the agreement to purchase a 20% interest in Xinhuan, which is a big step for our company to enter the energy storage market. China's energy storage industry has entered the fast track of development. With years of research and development and accumulation of energy storage technology, and active and innovative applications in the energy storage business, Xinhuan has emerged as a new star in the energy storage field with its leading energy storage system of MW-level "reserving - storing – supplying." With a front-end energy storage technology scheme of "distributed layout, modular design, unitized access and centralized regulation," Xinhuan has become a pioneer in the application of large-capacity battery energy storage systems in China. Several power storage stations have been built in Shandong and Shaanxi provinces in China.  Upon the completion of our acquisition of 20% equity interest in Xinhuan, we expect that Xinhuan could contribute about RMB 20 million as the investment income to the Company under equity method of accounting each year due to the Company's 20% ownership and voting stock of Xinhuan. With the combination of our market resources and customer relationship advantages and the energy storage technology advantages of Xinhuan, we expect to quickly seize a leading position in the energy storage market in China, promote new profit growth, and finally achieve both revenue and profit growth.

About Xi'an Xinhuan Energy Co., Ltd.
Xi 'an Xinhuan Energy Co., Ltd. was established in 2005, with its manufacturing base located in Xinfeng industrial park, Lintong district, Xi 'an (covering an area of more than 100 mu, with workshops covering over 20,000 square meters). Since its establishment, Xinhuan has been focused on energy conservation and environmental protection, and has engaged in industrial waste heat power generation, new energy research and development, the production and engineering of complete sets of equipment, engineering design, engineering general contracting, investment and operating, and advisory services. Xinhuan's clients cover a variety of industries, including metallurgy, electric power, building materials, and chemical industries with hundreds of energy saving projects and emissions reduction in several provinces and autonomous regions of China. Xinhuan owns design and manufacturing qualifications for A-class boilers, class one and two qualifications for pressure vessels, a C-class design qualification of power industry, a class three qualification of power engineering construction and a class two qualification for electromechanical installation and construction, as well as six patents and core technologies with independent intellectual property rights.

Xinhuan has the technology to integrate core equipment for energy storage systems and the capacity for the battery PACK production line. In the next three years, Xinhuan plans to build a PACK production line with an annual output of 3GWH to fully meet its energy storage project demands and expand into the international market. The energy storage management system developed by Xinhuan has been gradually put into use in existing projects. Xinhuan's development and use of PCS, a battery energy control management system(BMS)and a smart energy management system (EMS) of the battery inverter management system of the energy storage power station shows that Xinhuan has formed a complete set of core technology for energy storage management that will ensure the smooth development of its energy storage business. Further, Xinhuan has put its intelligent energy cloud platform into operation, which has powerful abilities to manage and make data compatible. The intelligent energy cloud platform can not only be used in energy storage projects to achieve timely and efficient management of unattended energy storage power stations, but also can be used in the distributed generation stations of new energies such as wind power, photovoltaic project docking, as well as realizing the effective combined control for large thermoelectric and hydropower stations. The platform could also build the foundation for the management of efficient energy storage power stations and eventually become the only comprehensive energy management service platform for various energies.

About China Recycling Energy Corp.
China Recycling Energy Corp. (NASDAQ:CREG, 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://www.creg-cn.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:

Ms. Adeline Gu, CFO & Secretary 
China Recycling Energy Corp.
Tel: +86 29 8765 1098
Email: sunny@creg-cn.com

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