Hong Kong firm Green Energy buys recycling facility in Germany

Thursday, May 26, 2016

Hong Kong-based Green Energy Group Ltd. is acquiring a recycling facility in Bunde, Germany.

The 400,000 euro ($445,000) cash deal includes two parcels of land as well as all existing buildings and structures, but excludes machines, Green Energy said in a May 23 filing with the Hong Kong Stock Exchange, the same day it entered the purchase agreement. The parcels measure about 4,519 square meters and 3,602 square meters, respectively.

The purchasing party is EnviroAssets GmbH, an indirect wholly-owned subsidiary of Green Energy, while the seller is an individual named Stefan Kolthoff.

Green Energy said it intends to operate a plastic recycling business at the property, which it expects will “contribute positively to the future growth” and generate synergies with its existing operations.

The facility used to house Kolthoff GmbH and its plastic and rubber recycling business, but the company entered liquidation on Nov. 1, 2014. In the same month, German authorities the State Labour Inspectorate ordered Kolthoff to remove the scrap materials that had been allegedly unlawfully stored at the property, but the order was not complied with.

Since the clearance of the scrap materials is a pre-condition required by the local authorities before they would grant the necessary license and permits for conducting recycling business on the property, Green Energy is paying HK$6.39 million ($823,000) to have the scrap materials — about 2,000 metric tons of EPDM or waste rubber rolls and sheets — cleared by Upframe Ltd., a British Virgin Islands company wholly owned by Kolthoff.

Green Energy said the market value of the facility was evaluated at 1.38 million euros ($1.4 million) as of April 6. Since the total cost of the deal, including removal of waste materials stands at HK$9.89 million ($1.2 million), the company considers the deal “commercially favorable.”

In 2015, the company also acquired a property in Sande, Germany, from Guzman Ventures for HK$8.5 million, with plans to expand its existing recycling operations there — adjacent to the newly-acquired property.

The company said the existing plastics sorting and recycling facilities in Europe — currently about 1,200 active sites — will not be able to have enough capacity to process the waste materials generated there. It quoted a study by consultancy ecoprog that estimates up to 300 new plastics sorting plants will be commissioned in Europe by 2025.

In addition to recycling operations, Green Energy also conducts trading of bio-cleaning materials and waste construction materials. Its total revenue tanked 48.6 percent in 2015 to HK$1.2 million.


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