Glonghui, March 15, 丨 Qiangtai Environmental Protection (01395.HK) announced that on March 15, 2024, PT Rimba Palma Sejahtera Lestari, a non-wholly-owned subsidiary of the company, entered into a framework agreement for the seller and PT Indorama Eco Viridian. According to this, the seller conditionally agreed to sell and the buyer conditionally agreed to acquire the target business at a total cost of IDR 60 billion. The transaction was carried out in accordance with the terms and conditions of the framework agreement.” “Target business” refers to the wood pellet production business currently operated and managed by RPSL.
The Board considers the net proceeds from the sale to be approximately IDR 40.6 billion (equivalent to approximately HK$20.3 million). Since the target business has been in a loss situation for the two years ending December 31, 2022 and 2023, the Group expects the sale to reduce the level of losses and increase the Group's overall profitability. Furthermore, the proceeds from the sale will enable the Group to reallocate its financial resources to repay part of its existing external loans, helping the Group reduce its annual financing costs and reduce its balance to liability ratio in the current high interest rate environment.
The sale also enabled the Group to centrally manage sewage treatment facilities operated by Rugao Hengfa Water Treatment Co., Ltd., the Bangka Island Power Plant Development Project, and other businesses that the Group believes have high profits and high return and development potential.