25 Jun 2010 07:00
25 June, 2010
Origo Partners PLC
Investment in Jinan Eco-Energy Technology Co.Ltd
Origo Partners Plc ("Origo") is pleased to announce an investment of up to US$6.65 million for a 20% equity stake in Jinan Eco-Energy Technology Co. Ltd ("Eco-Energy" or "the Company"), a Chinese provider and operator of recycling systems for waste plastic and scrap-tyres. This investment represents the third in a series of shortlisted investment opportunities for which Origo raised US$30 million through a placing completed on June 11th 2010.
Eco-Energy designs, develops, markets and operates recycling systemswhich convert scrap tyres and plastics into fuel oils and other value-added by-products. The Company benefits from proprietary technologies that are either protected by international patents or have patents pending and an experienced management team with significant industry and technical experience. Eco-Energy's systems are provided as turn-key solutions to third party project developers or operated in joint-ventures with selected local partners.
Eco-Energy's technology is already successfully deployed in a commercial scale recycling plant in Taiwan with a processing capacity of 20,000 tonnes of scrap tyres per annum, and the Company has orders from customers in Europe, South East Asia, and China for the delivery in 2010/11 of recycling systems with an aggregate annual processing capacity of 90,000 tonnes of tyre and plastic residue. In addition, the Company is co-developing two plants with joint venture partners in China and Germany with an initial aggregate annual production capacity of 30,000 tonnes per annum. The World Business Council for Sustainable Development estimates there are approximately 4 billion disposed scrap tyres (equivalent to 55 million tons) in landfills and stockpiles around world.
Under the terms of the transaction, Origo will subscribe to US$3 million of redeemable preferred stock for an equity stake of 10.5% and maintain an option to invest an additional US$3.65 million for a fully-diluted equity interest of 20% in the business. The proceeds of the fund-raising will be dedicated to sales and marketing, general corporate purposes and for funding Eco-Energy's capital contribution to the development of its German joint venture. Origo's investment in Eco-Energy will be held through Achieve Stars Development Ltd, a special purpose holding vehicle.
Commenting on the announcement, Chris Rynning, Chief Executive of Origo said:
"Dealing with growing landfills of waste plastic and scrap tyresis a growing problem in China and across the globe. We believe Eco-Energy's recycling systems provide a compelling alternative to non-value added methodsof disposal, especially in mature markets with well-established environmental regulatory regimes.
At the conservative end, we expect that recycling plants based on Eco-Energy's technologies will be processing in excess of 100,000 tonnes of scrap tyres and waste plastic per annum by end of 2011 with significant future potential for growth given the estimated 4 billion tyres in landfills around the world. Having worked closely with Eco-Energy's management over the last year, we are confident that the funding and ongoing assistance from Origo will enable the Company to quickly grow its operations in China and abroad to capture this opportunity"
For further information about Origo please visit www.origoplc.com or contact:
| Origo Partners plc Chris Rynning (chris@origoplc.com)
Niklas Ponnert (niklas@origoplc.com)
|
+86 1390 124 6417
+86 1351 106 1672 |
| Nominated Adviser and Broker: Liberum Capital Limited Simon Atkinson / Ellen Francis
| +44 (0)20 3100 2222 |
| Public Relations: Aura Financial Andy Mills / Nina Legge | +44 (0)20 7321 0000 |
Notes to editors:
Origo Partners Plc:
·; Origo is an established, London-listed private equity investor and strategic consultancy business, which provides its shareholders with exposure to growth opportunities and private equity returns based on the China growth story.
·; Origo's business model is to generate capital gains from private equity investment in growth companies from which it also generates fees for consultancy services related to further fundraisings, M&A and strategic development.
·; Origo signed a memorandum of understanding with GLG Partners LP in March 2008 to explore asset management and advisory opportunities in China, India and other markets.
·; Origo has a significant portfolio of investments in a range of industrial sectors, including metals and mining, agriculture, renewable energy/clean tech and technology, telecom and media ("TMT").
About Jinan Eco-Energy Technology Co. Ltd
·; Eco-Energy was founded by Mr. Niu, a recognized expert with 20 years of experience in the research and development of recycling technologies and waste-to-energy systems. Mr. Niu, who has numerous patents to his name, is Chairman of Eco-Energy and also serves as the Chairman of Shandong Huaneng Rubber Pyrolysis Research Institute and an adjunct professor of at the Qingdao University of Science & Technology.
·; Eco-Energy pursues a dual business model whereby the company delivers complete systems to third party project developers who carry the responsibility of building, financing and operating recycling plants based on Eco-Energy's technologies; and co-develops and operates recycling plants. In both models, the Company designs, assembles and installs complete systems on customers' premises, with manufacturing outsourced to third party components suppliers.
·; By-products from the Company's recycling facilities include carbon black, which is used in various industrial applications and raw materials for other rubber products, steel and non-condensable gas which may be used for electricity generation.